What is the firms optimal capital structure

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A clinic has obtained the following estimates for its costs of debt and equity at various capital structures:

% Debt                        After-tax Cost of Debt              Cost of Equity

0%                                           --                                          16%

20                                            7.0                                       17

40                                            8.5                                        18

60                                            10.0                                      20

70                                            13.0                                      24

What is the firm’s optimal capital structure?

Calculate its corporate cost of capital at each structure

Reference no: EM13924453

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