Cost of common equity and wacc patton paints corporation, Financial Management

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Cost of common equity and wacc patton paints corporation

Cost of Common Equity and WACC Patton 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 = $31.00. The last dividend was D0 = $3.75, 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 decimal places. rs = % WACC = %

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