8.1 million, and it pays cause it is all-equity financed, 55 of 8 percent. lar return to investors, and return on equity? results with those obtained in part a. 8.2 Calculate the effective (after-tax) cost of debt for Wallace Clinic, a for-profit health care provider, assuming that the interest rate set on its debt is 11 percent and its tax rate is set at the following levels: a. o percent b. 25 percent C. 40 percent 8.3 St. Vincent's Hospital has a target capital structure of 35 percent debt and 65 perc estimate is 7.5 percent. What is the hospital's corporate cost of capital? B.4 Richmond Clinic replacing half of its equity financing with debt financing liial vedl an interest rate a. What impact would the new capital structure have on the firm's profit, total.de b. Redo the analysis, but now assume that the debt financing would cost 15 percent C. Repeat the analysis required for part a, but now assume that Seattle Health Plans is a not-for-profit corporation and hence pays no taxes. Compare the cent equity. Its cost of equity estimate is 13 percent and its cost of tax-exempt debt END ale 81 Seattle Health Pd million, and it pays taxes al cause it is all-equity financed, $5 millio of 8 percent. lar return to investors, and return on equity? results with those obtained in part a. rate is set at the following levels: a, o percent b. 25 percent 640 percent 8.3 St. Vincent's Hospital has a target capital structure of 35 percent debt and 65 per- estimate is 7.5 percent. What is the hospital 3.4 Rich replacing half of its equity financing with debt findlicnu 2. What impact would the new capital structure have on the firm's profit, total dol Redo the analysis, but now assume that the debt financing would cost 15 percent. Repeat the analysis required for part a, but now assume that Seattle Health Plans is a not-for-profit corporation and hence pays no taxes. Compare the 8.2 Calculate the effective (after-tax) cost of debt for Wallace Clinic, a for-profit health- care provider, assuming that the interest rate set on its debt is 11 percent and its tax cent equity. Its cost of equity estimate is 13 percent and its cost of tax-exempt deb