Morningside nursing home,a not-for profit corporation, is estimating its corporate cost of capital. Its tax-exempt debt currently requires an interest rate of 6.2percent and its target capital structure call for 60 percent debt financing and 40 percent equity(fund capital) financing The estimate cost of equity for selected invester-owned health care companies are given below,Glaxo Wellcome 15.0%,Beverly Enterprices 16.4,HEALTHSOUTH 17.4,Humana 18.8,,A. What is the best estimate for Morningside’s cost of equity?,,,B. What is the firm’s corporate cost of capital?,,
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