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Problem 1 Calculate the effective after-tax cost of debt for Apopka Clinic, a for-profit healthcare provider. xsuming the interest rate set on its debt is
Problem 1 Calculate the effective after-tax cost of debt for Apopka Clinic, a for-profit healthcare provider. xsuming the interest rate set on its debt is 10% and its tax rate is set at the following levels: a percent b. 25 percent c. 40 percent Problem 2 Tampa Hospital has a target capital structure of 40% debt and equity. Its cost of equity estimate is 12% and its cost of tax-exempt debt estimate is 6.2% What is the hospital's corporate cost of capital? Please show your work Problem Burleson Clinic has obtained the following estimates for its costs of debt and equity at various capital structures After-Tax Cost of Debt (%) Cost of Equity (% Proportion of Debt 096 20% OS 6.2 7.5 9.8 15.0 14.0 15.0 17.0 20.0 24.0 60% BON What is the firm's optimal capital structure? (Hint: Complete the following table. When done, identified the optimal capital structure. Proportion Proportion Corporate of Debt After-Tax Cost of Debt of Louity Cost of Equity Cost of Capital 09 14.0 20% 6.2 15.0 40% 7.5 17.0 60% 9.8 20.0 24.0 15.0
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