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Sawbones Surgery Center has a current capital structure that consists of 70 percent equity and 30 percent debt, but a target capital structure of 35%

Sawbones Surgery Center has a current capital structure that consists of 70 percent equity and 30 percent debt, but a target capital structure of 35% equity and 65% debt. The companys long-term bonds have a before-tax yield to maturity of 8.4 percent. If the companies risk premium for equity is 6 percent and a tax rate of 40 percent, what is its corporate cost of capital (CCC)?

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