The assignment must be submitted in Excel format
End of Chapter Problems 8.2 a. b. & c, Page 252 and 8.3, Page 252
10 points for the correct answer
Submit only in Excel – 0 points if submitted in any other format
2 extra credit points for submitting homework in an Excel spreadsheet using formulas and mathematical functions. Extra credit is all or nothing. There will be no partial credit.
0 points for late submissions
8.2 Calculate the effective (after-tax) cost of debt for Wallace Clinic, a for-profit healthcare provider, assuming that the interest rate set on its debt is 11 percent and its tax rate is
a. 0 percent
b. 20 percent
c. 40 percent
8.3 St. Vincent’s Hospital has a target capital structure of 35 percent debt and 65 percent equity. Its cost of equity (fund capital) estimate is 13.5 percent and its cost of tax-exempt debt estimate is 7 percent. What is the hospital’s corporate cost of capital?
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