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St. Vincents Hospital has a target capital structure of 45 percent debt and 55 percent equity. Its cost-of-equity (fund capital) estimate is 10.5 percent and
St. Vincents Hospital has a target capital structure of 45 percent debt and 55 percent equity. Its cost-of-equity (fund capital) estimate is 10.5 percent and its cost-of-debt estimate is 10 percent. Tax rate is 40%. What is the hospitals corporate cost of capital (in percentage)?
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