1. Morningside Nursing Home, a single not-for-profit facility, is estimating its corporate cost of capital. Its tax-exempt debt currently requires an interest rate of 6.2 percent, and its target capital structure calls for 60 percent debt financing and 40 percent equity (fund capital) financing. Since Morningside is a not-for-profit firm, it uses Beverly Enterprises' cost of equity (16.4 percent) as a proxy for its opportunity cost of fund capital. Beverly Enterprises is also in the nursing home business. What is the firm's corporate cost of capital?