D0=2.75
Price in year 0 =27
growth =9%
Cost of Equity as per dividend discount model =D0*(1+g)/P0+g
=2.75*(1+9%)/27+9% =20.1019%
Equity to Capital =1-Debt to Capital
WACC =(1-Debt Ratio)*Cost of Equity+Debt Ratio*Cost of Debt*(1-Tax
Rate)
12.05% =(1-Debt Ratio)*20.1019%+Debt Ratio*11%*(1-40%)
12.05% =20.1019%-Debt Ratio*20.1019%+Debt Ratio*6.6%
Debt Ratio =(20.1019%-12.05%)/(20.1019%-6.6%)
=59.64%
Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at...
Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd - 10%, and its common stock currently pays a $2.75 dividend per share (Do - $2.75). The stock's price is currently $24.00, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 25%, and its WACC is 16.00%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your...
Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 10%, and its common stock currently pays a $2.75 dividend per share (D0 = $2.75). The stock's price is currently $32.75, its dividend is expected to grow at a constant rate of 9% per year, its tax rate is 25%, and its WACC is 12.80%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your...
Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 10%, and its common stock currently pays a $3.75 dividend per share (D0 = $3.75). The stock's price is currently $27.00, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 40%, and its WACC is 12.35%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your...
Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 9%, and its common stock currently pays a $2.25 dividend per share (Do = $2.25). The stock's price is currently $29.50, its dividend is expected to grow at a constant rate of 9% per year, its tax rate is 25%, and its WACC is 13.85%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your...
Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 12%, and its common stock currently pays a $3.25 dividend per share (D0 = $3.25). The stock's price is currently $21.75, its dividend is expected to grow at a constant rate of 4% per year, its tax rate is 25%, and its WACC is 15.60%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your...
Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 10%, and its common stock currently pays a $3.25 dividend per share (D0 = $3.25). The stock's price is currently $32.75, its dividend is expected to grow at a constant rate of 5% per year, its tax rate is 25%, and its WACC is 12.25%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your...
Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 10%, and its common stock currently pays a $2.50 dividend per share (D0 = $2.50). The stock's price is currently $21.50, its dividend is expected to grow at a constant rate of 7% per year, its tax rate is 35%, and its WACC is 12.10%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your...
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 $3.00 dividend per share (D0 = $3.00). The stock's price is currently $29.75, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 35%, and its WACC is 14.10%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your...
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 (D0 = $3.75). The stock's price is currently $33.50, its dividend is expected to grow at a constant rate of 6% per year, its tax rate is 35%, and its WACC is 13.30%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your...
eBook Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd - 9%, and its common stock currently pays a $2.50 dividend per share (Do - $2.50). The stock's price is currently $30.25, its dividend is expected to grow at a constant rate of 7% per year, its tax rate is 25%, and its WACC IS 13.45%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round...