WACC and Percentage of Debt Financing
Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at r_d 9%, and its common stock currently pays a $2.25 dividend per share (D_0 = $2.25). The stock's price is currently $22.25, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 35%, and its WACC is 13.55%. What percentage of the company's capital structure consists of debt? %