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Hook Industries capital structure consists of solely debt and equity. It can issue debt at r d =11% and its common stock currently pays a

Hook Industries capital structure consists of solely debt and equity. It can issue debt at rd =11% and its common stock currently pays a dividend of $2 per share. The stocks current price is $24.75, its dividend is expected to grow at a constant rate of 7% per year, its tax rate is 35% and its WACC is 13.95%. What percentage of the firms capital structure consists of debt? trying to solve using a calculator .what to plug in? image text in transcribed
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1. O'Brien Ltd's outstanding bonds have a $1,000 par value, and they mature in 25 years. Their nominal yield to maturity is 9.25%, they pay interest semiannually, and they sell at a price of $975. What is the bond's nominal coupon interest rate? 2. The Pennington Corporation issued bonds on January 1 , 1987. The bonds were sold at par, had 12% annual coupon, paid semi-annually, and mature on December 31,2016. a) What was the Yield-to-Maturity (YTM) on the date the bonds were issued? b) What was the price on January 1, 1992, assuming interest rates have fallen to 10% ? c) Find the current yield, capital gains/losses yield and total yield on January I, 1992 ? 3. MeCue Inc.'s bonds currently sell for $1,250. They pary a $120 annual coupon, have a 15 -year maturity, and a $1,000 par value, but they can be called in 5 years at $1,050. What is the bond's Yield to Maturity and its Yield to Call? 4. Cosmic Communications Inc. is planning two new issues of 25-year bonds. Bond Par will be sold at its $1,000 par value, and it will have a 10% semiannual coupon. Bond OID will be an Original Issue Discount bond, and it will also have a 25 -year maturity and a $1,000 par value, but its semiannual coupon will be only 6.25%. If both bonds are to provide investors with the same effective yield, how many of the OID bonds muss Cosmic issue to raise $3,000,000 ? 5. A 25-year, $1,000 par value bond has an 8.5% annual coupon. The bood currently sells for $875. If the yield to maturity remains at its current rate, what will the price be 5 years from now

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