Question
Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at r d = 11%, and its common stock currently
Hook Industries's capital structure consists solely of debt and common equity.
It can issue debt at rd = 11%, and its common stock currently pays a $2.25 dividend per share (D0 = $2.25).
The stock's price is currently $22.25, its dividend is expected to grow at a constant rate of 9% per year, its tax rate is 25%, and its WACC is 15.90%.
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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The New Microfinance Handbook A Financial Market System Perspective
Authors: Joanna Ledgerwood, Julie Earne, Candace Nelson
1st Edition
0821389270, 978-0821389270
