8.6 Discuss some factol! ness's target capital structure. END-OF-CHAPTER PROBLEMS of 8 percent a. What impact would the new capital structure have on the firm's profit, total del lar return to investors, and return on equity? b. Redo the analysis, but now assume that the debt financing would cost 15 percent. C. Repeat the analysis required for part a, but now assume that Seattle Health Plans is a not-for-profit corporation and hence pays no taxes. Compare the results with those obtained in part a. - Calculate the effective (after-tax) 8.7 How is a business's cost of debt estimated? Its cost of equity? 8.8 Explain the calculation and interpretation of the corporate cost of capital. 8.1 Seattle Health Plans currently uses zero-debt financing. Its operating profit is $1 million, and it pays taxes at a 40 percent rate. It has $5 million in assets and, be. replacing half of its equity financing with debt financing that bears an interest rate cause it is all-equity financed, $5 million in equity. Suppose the firm is considering