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26 January 2021 at 2:07 PM GenuinelCare is a company that offers residential health care services. The company has $250 million in interest- bearing debt

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26 January 2021 at 2:07 PM GenuinelCare is a company that offers residential health care services. The company has $250 million in interest- bearing debt (in book value and market value terms). The firm has 20 million shares trading at $ 10 a share, and the unlevered beta of firms in the health care business is 0.9. The firm has a current rating of B, with a default spread of 0.05 over the risk free rate. The risk free rate is 0.045, the market risk premium is 0.06 and the corporate tax rate is 40%. 1-Estimate the debt to capital ratio for the firm. 2-Estimate the debt to equity ratio for the firm. 3-What is the beta levered for the firm? 4-Estimate the cost of debt for the firm. 5-Estimate the after tax cost of debt for the firm. 6-Estimate the cost of equity for the firm. Answer for part 6 7-Estimate the cost of capital for the firm

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