Its estimated cost of equity is 164 percent what is


Morningside Nursing Home, a not-for-porfit corporation, is estimating its corporate cost of capital. Its tax exempt debt currently requires an interest rate of 6.2 percent, and its target capital structure calls for 60 percent debt financing and 40 percent equity (fund capital) financing. Its estimated cost of equity is 16.4 percent. What is Morningside's corporate cost of capital?

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Finance Basics: Its estimated cost of equity is 164 percent what is
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