Assume a for-profit skilled facility chain has a target

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Assume a for-profit skilled facility chain has a target capital structure that is 40% debt and 60% equity. Assume the chain plans to finance a new project with 50% debt and 50% equity. The marginal before-tax cost of debt is 8%, the tax rate is 35%, and the marginal cost of equity is estimated to be 14%. What is the organization's corporate cost of capital (rounded to the nearest tenth of a percent)?

Reference no: EM13618759

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