Company capital structure consists of debt

Assignment Help Financial Management

Reference no: EM132047284

WACC AND PERCENTAGE OF DEBT FINANCING

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 $2.00 dividend per share (D0 = $2.00). The stock's price is currently $33.00, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 40%, and its WACC is 13.45%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places.

Reference no: EM132047284

Questions Cloud

Calculate the all-in cost : The loan is for a period of 180 days with a stated rate of 6.4 percent computed as simple interest on an actual/ 360- day basis. Calculate the all-in cost.

The capital structures used by us firms : In general, the capital structures used by U.S. firms:

Operating leverage at the accounting break-even point : What is the accounting break-even level of output for this project? What is the degree of operating leverage at the accounting break-even point?

What is the total market value of this firm : What is the total market value of this firm? What is the company’s weighted average cost of capital?

Company capital structure consists of debt : Its tax rate is 40%, and its WACC is 13.45%. What percentage of the company's capital structure consists of debt?

Explain the impact of each variable on company valuation : What are the three (3) variables that drive the valuation of a company? Explain the impact of each variable on company valuation.

What was total real return on investment : If the inflation rate was 3.2 percent over the past year, what was your total real return on investment?

What return would you estimate for this asset : What return would you estimate for this asset over the next 10 years?

What would be cost of new equity : New stock can be sold to the public at the current price, but a flotation cost of 10% would be incurred. What would be the cost of new equity?

User Account

All Pages