Wacc and percentage of debt financing

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WACC and Percentage of Debt Financing

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 $4.00 dividend per share (D0 = $4.00). The stock's price is currently $25.50, its dividend is expected to grow at a constant rate of 4% per year, its tax rate is 35%, and its WACC is 13.95%. What percentage of the company's capital structure consists of debt? Round your answer to two decimal places.

%

Me: Trying to solve this... I am stuck at the the part in bold.

rs D1/Po+g

=

($4.00) (?) /($25.50) + 4%

=

Reference no: EM131510854

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