What is the firm corporate cost of capital

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A single not-for-profit nursing home is estimating its corporate costs of capital. Its tax-exempt debt currently requires an interest rate of 6.2% and its target capital structure calls for 60% debt financing and 40% equity financing. The estimated costs of equity for selected investor-owned healthcare companies are given below:

-15.0%

-16.4%

-17.4%

-18.8%

What is the best estimate of the nursing home's cost of equity?

What is the firm's corporate cost of capital?

Reference no: EM132801850

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