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Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at rd = 9%, and its common stock currently pays a $1.75 dividend per share (D0 = $1.75). The stock's price is currently $20.00, its dividend is expected to grow at a constant rate of 7% per year, its tax rate is 40%, and its WACC is 12.35%. What percentage of the company's capital structure consists of debt?

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