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Palencia paints corporation has a target capital structure of 45% debt and 55% common equity, with no preferred stock. its before-tax cost of debt is
Palencia paints corporation has a target capital structure of 45% debt and 55% common equity, with no preferred stock. its before-tax cost of debt is 12%, and its marginal tax rate. is 25\%. The current stock price is P0=$34.50. The last dividend was D0=$3.50, and it is expected to grow at a 4% constant rate. What is its cost of comman equity and its WACC? Do not round intermedite calculations. Asund your answers to two decimal places. ry=WACC=
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