Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A
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 $3.75 dividend per share (Do $3.75). The stock's price is
currently $21.75, its dividend is expected to grow at a constant rate of 7% per year, its tax rate is 25%,
and its WACC is 13.10%. 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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Transcribed Image Text:A 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 $3.75 dividend per share (Do $3.75). The stock's price is currently $21.75, its dividend is expected to grow at a constant rate of 7% per year, its tax rate is 25%, and its WACC is 13.10%. 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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