Investment Analysis & Cost of Capital
Paper , Order, or Assignment Requirements
Since you are employed as a Finance Consultant at a not-for-profit company, you are aware the company has $20 million of long-term tax-exempt debt with an interest rate of 6.0%. The organization also has $3 million of unrestricted net assets, with an estimated cost of capital of 7.5%, and $9 million in an endowment with an estimated 5.0% return on assets (cost of capital).
Prepare a 10 slide PPT with speaker notes (excluding cover and references) you will use in your meeting with the Chief Executive Officer (CEO) and the Chief Financial Officer (CFO) describing how capital structures differ between for-profit and not-for-profit health care organizations. Include an evaluation of the weighted average of the cost of capital in your analysis and the actions the executives should take to lower the weighted average.