1 suppose the total dollar amount of a for profit hosptal, Ask an Expert

Finance

1. Suppose the total dollar amount of a for profit hosptal is 0.75 capital and 0.25 debt. Assume the stockholders are receiving 10% in return while the creditors are getting 8%.

a. What is the corporate cost of capital of this hospital?

b. What would be the corporate cost of capital at 40% tax?

2. Which of the following is a characteristic of beta?

a. Beta measures only the volatility of returns on an individual bond relative to a bond market index.

b. A beta of 1.0 has zero risk.

c. A beta of less than 1.0 has less risk than the market.

d. A beta is always equal to 1.0.

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Financial Management, Finance

Category:- Financial Management
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