Patton paints corporation has a target capital structure of, Financial Management

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Patton paints corporation has a target capital structure of

Patton Paints Corporation has a target capital structure of 40 percent debt and 60 percent common equity, with no preferred stock. Its before-tax cost of debt is 12 percent, and its marginal tax rate is 40 percent. The current stock price is P0 = $22.50. The last dividend was D0 = $2.00, and it is expected to grow at a constant rate of 7 percent. What is its cost of common equity and its WACC?

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Financial Management: Patton paints corporation has a target capital structure of

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Financial Management: Patton paints corporation has a target capital structure of

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