The last dividend was d0 250 and it is expected to grow at


Palencia Paints Corporation has a target capital structure of 40% debt and 60% common equity, with no preferred stock. Its before-tax cost of debt is 12%, and its marginal tax rate is 40%. The current stock price is P0 = $31.50. The last dividend was D0 = $2.50, and it is expected to grow at a 6% constant rate. What is its cost of common equity and its WACC? Round your answers to two decimal places. Do not round your intermediate calculations.

rs =  %

WACC =  %

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Financial Management: The last dividend was d0 250 and it is expected to grow at
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