Healthcare finance 6th Edition book

Plans currently uses zero-debt income ( financing. Its Problems 13:1 sanie (earnings before interest and tancing. ings before interest and taxe es, or EBIT) 3.1 Seattle Seattle Health Plans erating million in cqi its equity finand S1 million, and it pays taxes at a 40 S ets ad, because it is all-equity financed, s5 iha s the firm is consieing replacing half of percent with debt financing bearing an interest rate of 8yf new capital structure have on and ROE b. Redo the analysis, but now assume that the debt fin wit aet impact would the newrn to investors, and ROB net income, total dollar return to investors ave on the would cost 15 percent. e. Now, assume tha of 20 c. Return to the initial 8 percent interest rate. Now EBIT could be as low as $500,000 (with a probablity percent) or as high as $1.5 million (with a probability of 20 percent ). There remains a 60 percent chance that EBIT wolk be $1 million. Redo the analysis for each level of EBIT, and fin the expected values for the firm's net income, total dolla rcu