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Richmond Clinic has obtained the following estimates for its costs of debt and equity at various capital structures: Percent Debt Percent After-Tax Cost of
Richmond Clinic has obtained the following estimates for its costs of debt and equity at various capital structures: Percent Debt Percent After-Tax Cost of Cost of Equity Debt Equity 20.00% 80.00% 7.00% 16.00% 30.00% 70.00% 9.60% 17.00% 40.00% 60.00% 13.80% 19.00% 65.00% 35.00% 15.20% 22.00% 95.00% 5.00% 18.00% 25.00% What is the firm's optimal capital structure? (Hint: Calculate its corporate cost of capital at each structure. Also, note that data on component costs at alternative capital structures are not reliable in real-world situations.) Report the actual CCC of the capital structure you would have determined to the optimal capital structure. Round your answer to two decimal points. Do not enter the % sign as it could results into a 0 and wrong your answer.
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Quantitative Analysis for Management
Authors: Barry Render, Ralph M. Stair, Michael E. Hanna, Trevor S. Ha
12th edition
133507335, 978-0133507331
