Big Pharm corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 8%, and its marginal tax rate is 40%. The current stock price is . The last dividend was D0 = $2,25 , and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC?

stock price is $20

Big Pharm corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 8%, and its marginal tax rate is 40%. The current stock price is. The last dividend was DO=$2,25, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC