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How do I solve this? Palencia Paints Corporation has a target capital structure of 40% debt and 60% common equity, with no preferred stock. Its
How do I solve this?
Palencia Paints Corporation has a target capital structure of 40% debt and 60% common equity, with no preferred stock. Its before-tax cost of debt is 11%, and its marginal tax rate is 25%. The current stock price is Po $33.50. The last dividend was Do $2.50, 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. = rs = % WACC = %Step by Step Solution
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