134 Richmond 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...

134 Richmond Clinic has obtained the f;llo i i : wing esti i of debt and equity at various capital structu?-cc:f e 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 pital at each structure. Also, note that data on corporate cost of ca component costs at alternative capital structures are not reliable in real-world situations.) > e e 1Is daividend


Extracted text: 134 Richmond 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 10.2 22 60 14.0 27 80 md labnanh What is the firm's optimal capital structure? (Hint: Calculate its corporate cost of capital at each structure. Also, note that data on component costs at alternative capital structures are not reliable in real-world situations.) nfit aroun practice. Its dividend