How do investors make money on an organizations stock? Question is from accounting fundamentals for health care mast 1110

200 Chapter 17 Capital Structure-Long Term Debt and Equity Financing Test Your Knowledge as and im nedlin on 1. What is capital structure? Why should 2. What is equity financing in the not-for- 3. 4. 5. What is the cost of capital? stock that is estimated to have a cost of capital of 10%. What is its weighted average cost of capital? 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 net assets without donor restrictions, with an estimated cost of capital of 6%, and $4 million of net assets with donor restrictions (in an endowment), with an estimated 7% return on assets (cost of capital). What is its weighted average cost of capital? health care organizations care about it? 7. profit sector? How do investors make money on an organization's stock? What is the difference between com- mon and preferred stock? Assume a for-profit company has $8 million of long-term debt with an interest rate of 6%. It has $3 million of preferred stock with a required dividend 6