8 Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 8%, and its common stock currently pays a $4.00 dividend per share (D0 = $4.00). The stock's price is currently $26.50, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 25%, and its WACC is 14.55%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places. % 11. Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently selling for $95.00, but flotation costs will be 8% of the market price, so the net price will be $87.40 per share. What is the cost of the preferred stock, including flotation? Round your answer to two decimal places. %

8 Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 8%, and its common stock currently pays a $4.00 dividend per share (D0 = $4.00). The stock's price is currently $26.50, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 25%, and its WACC is 14.55%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places. % 11. Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently selling for $95.00, but flotation costs will be 8% of the market price, so the net price will be $87.40 per share. What is the cost of the preferred stock, including flotation? Round your answer to two decimal places. %

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter15: Dividend Policy

Section: Chapter Questions

Problem 4P

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