What does chippenham hospital wacc indicate

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Reference no: EM132741345

You are to determine the WACC for Chippenham Hospital. Provide a brief report in which you state your determination of WACC, describe and justify how you determined the number, and provide a relevant discussion of your findings. Refer to the WACC formula : WACC = Kd(1-t)(D / V) + Ke(E/V)

Assumptions:

Chippenham Hospital has a cost of debt of 6%, a corporate tax rate of 40%, and a debt weight of 60%.
Chippenham Hospital has a cost of equity of 11.4% and an equity weight of 40%.

Problem 1: What does Chippenham Hospital WACC indicate? How could decision makers use this information?

Reference no: EM132741345

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