Question: C. Problem -3-: (06 Marks) Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at 10% interest rate, and

C. Problem -3-: (06 Marks) Hook Industries' capital structure consists solely of debt and common equity. It can issue debt at 10% interest rate, and its common stock currently pays a $2 dividend per share. The stock's price is currently $20; its dividend is expected to grow at a constant rate of 5 percent per year; its tax rate is 35 percent; and its WACC is 12 percent. 1. Calculate the cost of debt and the cost of common stock. 2. What percentage of the company's capital structure consists of debt

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