GenuinelCare is a company that offers residential health care services. The company has $200 million...
90.2K
Verified Solution
Link Copied!
Question
Accounting
GenuinelCare is a company that offers residential health care services. The company has $200 million in interest-bearing debt (in book value and market value terms). The firm has 25 million shares trading at $ 25 a share, and the unlevered beta of firms in the health care business is 0.9. The firm has a current rating of B, with a default spread of 0.05 over the risk free rate. The risk free rate is 0.045, the market risk premium is 0.06 and the corporate tax rate is 40%.
Estimate the debt to capital ratio for the firm.
Answer for part 1
Estimate the debt to equity ratio for the firm.
Answer for part 2
What is the beta levered for the firm?
Answer for part 3
Estimate the cost of debt for the firm.Answer for part 4
Estimate the after tax cost of debt for the firm.
Answer for part 5
Estimate the cost of equity for the firm.Answer for part 6
Estimate the cost of capital for the firm.
Answer for part 7
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
- Unlimited Question Access with detailed Answers
- Zin AI - 3 Million Words
- 10 Dall-E 3 Images
- 20 Plot Generations
- Conversation with Dialogue Memory
- No Ads, Ever!
- Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Other questions asked by students
StudyZin's Question Purchase
1 Answer
$0.99
(Save $1 )
One time Pay
- No Ads
- Answer to 1 Question
- Get free Zin AI - 50 Thousand Words per Month
Unlimited
$4.99*
(Save $5 )
Billed Monthly
- No Ads
- Answers to Unlimited Questions
- Get free Zin AI - 3 Million Words per Month
*First month only
Free
$0
- Get this answer for free!
- Sign up now to unlock the answer instantly
You can see the logs in the Dashboard.