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CDO II is expected to further reduce Gramercy's weighted average cost of debt capital, enhance Gramercy's ability to offer a broader array of commercial mortgage finance solutions to its borrowers, and improve its leveraged returns on equity capital. It is determined by adding the weighted cost of debt to the weighted cost of equity to determine the required rate of return. This raises the cost of debt and makes it harder to borrow--just as hospitals are attempting to meet new state seismic standards and expand clinical services. |
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