8 Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 8%, and its common stock currently pays a $4.00 dividend per share (D0 = $4.00). The stock's price is currently $26.50, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 25%, and its WACC is 14.55%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places. % 11. Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently selling for $95.00, but flotation costs will be 8% of the market price, so the net price will be $87.40 per share. What is the cost of the preferred stock, including flotation? Round your answer to two decimal places. %

8 Hook Industries's capital structure consists solely of debt and common equity. It can issue debt at rd = 8%, and its common stock currently pays a $4.00 dividend per share (D0 = $4.00). The stock's price is currently $26.50, its dividend is expected to grow at a constant rate of 8% per year, its tax rate is 25%, and its WACC is 14.55%. What percentage of the company's capital structure consists of debt? Do not round intermediate calculations. Round your answer to two decimal places. % 11. Travis Industries plans to issue perpetual preferred stock with an $11.00 dividend. The stock is currently selling for $95.00, but flotation costs will be 8% of the market price, so the net price will be $87.40 per share. What is the cost of the preferred stock, including flotation? Round your answer to two decimal places. %

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter9: The Cost Of Capital

Section: Chapter Questions

Problem 7P

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