Question: Dr. ST. Rose Assignment #3 Case B: Morningside Nursing Home, a single not-for-profit facility, is estimating its corporate cost of capital. Its tax-exempt debt

Dr. ST. Rose Assignment #3 Case B: Morningside Nursing Home, a single

Dr. ST. Rose Assignment #3 Case B: Morningside Nursing Home, a single not-for-profit facility, is estimating its corporate cost of capital. Its tax-exempt debt currently requires an interest rate of 6.2%, and its target capital structure ca for 60% debt financing and 40% equity financing. The estimated costs of equity for selected investor owned healthcare companies are given below Glaxo 15% Beverly Enterprises 16.4% (only this company is in the nursing home business) Healthsouth 17.4% Humana 18.8% a. Which company is at best estimate for Morningside's cost of equity?

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