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Clinic has obtained the following estimates for its costs of debt and equity at various capital structures:
Percent Debt After Tax Cost of Debt Cost of Equity
0 %  16 %
20 6.6 % 17
40 7.8 19
60 10.2 22
80 14.0 27
What is the firm’s optimal capital Structure? (Hint: Calculate its corporate cost of capital at each structure. Also, note that data on component cost at alternative capital structure are not reliable in real world situation).
 one year ago
 one year ago
Clinic has obtained the following estimates for its costs of debt and equity at various capital structures: Percent Debt After Tax Cost of Debt Cost of Equity 0 %  16 % 20 6.6 % 17 40 7.8 19 60 10.2 22 80 14.0 27 What is the firm’s optimal capital Structure? (Hint: Calculate its corporate cost of capital at each structure. Also, note that data on component cost at alternative capital structure are not reliable in real world situation).
 one year ago
 one year ago

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