Cost of Common Equity and WACC
Palencia 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 13% and its marginal tax rate is 40%. The current stock price is P_D = $20.00. The last dividend was D_a = $2.25, and it is expected to grow at a 4% constant rate,
What is its cost of common equity and its WACC? Round your answers to two o decimal places. Do not round your intermediate calculations.