Cost of common equity and waccpalencia paints corporation, Ask an Expert

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Cost of Common Equity and WACC

Palencia Paints Corporation has a target capital structure of 25% debt and 75%, common equity, with no preferred stock. Its before tax cost of debt is 13% and its marginal tax rate is 40%. The current stock price is P_D = $20.00. The last dividend was D_a = $2.25, and it is expected to grow at a 4% constant rate,

What is its cost of common equity and its WACC? Round your answers to two o decimal places. Do not round your intermediate calculations.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92361029

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