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Problem:

Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at rd = 10%, and its common stock currently pays a $3.00 dividend per share (D0 = $3.00). The stock's price is currently $29.00; its dividend is expected to grow at a constant rate of 9% per year; its tax rate is 35%; and its WACC is 14.00%.

Requirement:

Question: What percentage of the company's capital structure consists of debt?

Note: Please show basic calculation

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M91167294

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