COST OF COMMON EQUITY AND WACC 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 8%, and its marginal tax rate is 40%. The current stock price is P 0 = $22.00. The last dividend was D 0 $2.25, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC?
Fundamentals of Financial Manageme...
Fundamentals of Financial Manageme...
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COST OF COMMON EQUITY AND WACC 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 8%, and its marginal tax rate is 40%. The current stock price is P0 = $22.00. The last dividend was D0 $2.25, and it is expected to grow at a 5% constant rate. What is its cost of common equity and its WACC?
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