Palencia Paints Corporation has a target capital structure of35% debt and 65% common equity, with no preferred stock. Itsbefore-tax cost of debt is 9%, and its marginal tax rate is 40%.The current stock price is P0 = $21.50. The lastdividend was D0 = $2.00, and it is expected to grow at a6% constant rate. What is its cost of common equity and its WACC?Round your answers to two decimal places. Do not round yourintermediate calculations.
- rs = _______ %
- WACC = ________ %
