eBook Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity, with no preferred stock. Its before-tax cost of debt is 12%, and its marginal tax rate is 40%. The current stock price is Po = $34.00. The last dividend was Do - $2.00, and it is expected to grow at a 4% constant rate. What is its cost of common equity and its WACC? Do not round Intermediate calculations. Round your answers to two decimal places. a.rs % b. WACC = %