1. Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at r_d= 10%, and its common stock currently pays a $3.25 dividend per share (D₀= $3.25). The stock's price is currently $31.75, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 25%, and its WACC is 13.95%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places.
2. Kahn Inc. has a target capital structure of 55% common equity and 45% debt to fund its $12 billion in operating assets. Furthermore, Kahn Inc. has a WACC of 15%, a before-tax cost of debt of 8%, and a tax rate of 25%. The company's retained earnings are adequate to provide the common equity portion of its capital budget. Its expected dividend next year (D₁) is $4, and the current stock price is $31.

a.What is the company's expected growth rate? Do not round intermediate calculations. Round your answer to two decimal places. %

b.If the firm's net income is expected to be $1.1 billion, what portion of its net income is the firm expected to pay out as dividends? Do not round intermediate calculations. Round your answer to two decimal places. (Hint: Refer to Equation below.). %

Growth rate = (1 - Payout ratio)ROE