Assume a non-profit company has $10 million of long-term tax-exempt debt with an interest of 4.5%. The
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Assume a non-profit company has $10 million of long-term tax-exempt debt with an interest of 4.5%. The organization has $7 million of net assets without donor restrictions, with an estimated cost of capital of 6% and $4 million of net assets with donor restrictions (in an endowments), with an estimated 7% return on assets (cost of capital). What is the weighted average of cost capital?
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-1259024962
6th Canadian edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus, Devashis Mitra, Elizabeth Maynes, William Lim
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