1.Assume a not-for-profit company has $10 million of long-term tax-exempt debt with an interest rate of 4.5%....
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Question:
1.Assume a not-for-profit company has $10 million of long-term tax-exempt debt with an interest rate of 4.5%. The organization has $7 million of unrestricted net assets, with an estimated cost of capital of 6%, and $4 million of restricted net assets (in an endorsement), with an estimated 7% return on assets (cost of capital). What is its weighted average cost of capital?
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