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What percentage of the company capital structure consists

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Reference no: EM132639533

Problem 1: Centrio Corporation has a capital structure that consists solely of debt and common equity. The company can issue debt at 11%. Its stock currently pays a P2 dividend per share and the stock's price is currently P24.75. The company's dividend is expected to grow at a constant rate of 7% per year. Its tax rate is 35%. The company estimates that its weighted average cost of capital (WACC) is 13.95%. What percentage of the company's capital structure consists of debt financing?

Reference no: EM132639533

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