Palencia Paints Corporation has a target capital structure of 35% debt and 65% common equity,...
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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 25%. The current stock price is P0 = $34.50. The last dividend was D0 = $2.00, and it is expected to grow at a 6% 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 = %
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