equity. stoc rice is currently $25.25, its dividend is expected to grow at a constant rate of 6% per year, its tax rate is 25% ucture consists of debt? Do not round intermediate calculations. Round your answer to two decimal places.

Corporate Fin Focused Approach
5th Edition
ISBN:9781285660516
Author:EHRHARDT
Publisher:EHRHARDT
Chapter9: The Cost Of Capital
Section: Chapter Questions
Problem 7P
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Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at ra = 12%, and its common stock currently pays a $3.25 dividend per share (Do =
$3.25). The stock's price is currently $25.25, its dividend is expected to grow at a constant rate of 6% per year, its tax rate is 25%, and its WACC is 14.80%. What percentage of the
company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places.
%
Transcribed Image Text:Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at ra = 12%, and its common stock currently pays a $3.25 dividend per share (Do = $3.25). The stock's price is currently $25.25, its dividend is expected to grow at a constant rate of 6% per year, its tax rate is 25%, and its WACC is 14.80%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places. %
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