Hook industries' capital structure consists solely of debt and common equity. it can issue debt at rd = 11%, and its common stock currently pays a $2.00 dividend per share (d0 = $2.00). 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 40%, and its wacc is 13.80%. what percentage of the company's capital structure consists of debt? do not round intermediate calculations. round your answer to two decimal places.

The company's capital structure consists of debt consists of 26.38% (Calculation: 13.80% = wd(11%)(1 – 0,40) + (1–wd)(16.38%)--> wd = 26.38% ) of debt based on the information shown on the question above. This problem can be solved by using the WACC which stated as WACC = wd(rd)(1 – T) + (1-wd)(rs) where WD is the debt percentage, rd is the return from debt capital, T is the tax, and rs is the return from the equity capital. First, you must find the return from equity by using this formula rs = D1/P0 + g (Calculation : 16.38% = $2(1.09)/$29.5 + 9%).