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Patton 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 10% and its marginal tax rate is 40%. The current stock price is P0 = $30.00. The last dividend was D0 = $3.75, and it is expected to grow at a 7% constant rate. What is its cost of common equity and its WACC?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92410324

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