COST OF COMMON EQUITY AND WACC Patton 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 = $22.50. The last dividend was D0 = $2.00, and it is expected to grow at a 7% constant rate. What is its cost of common equity and its WACC?