Target capital structure-what is its cost of common equity

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Reference no: EM131078265

Patton 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 P0 = $22.00. 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? Round your answers to two decimal places.

r_s = %

WACC = %

Reference no: EM131078265

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