The Blended Cost of Capital

Example Definitions of "The Blended Cost of Capital"
The Blended Cost of Capital. The weighted average of the cost of equity capital and the cost of debt capital. The cost of equity capital is the average ten year U.S. Treasury Note rate, plus a market risk premium of 5% modified by the Company's 10-year beta vs. the S&P 500 index. The average ten year U.S. Treasury Note rate shall be calculated as the average of the rate at the beginning of each quarter in the year for which a bonus award is calculated, defined as the published rate at the close of the last business day... prior to the first day of the quarter. The cost of equity capital is blended pro rata (comparing market capitalization of RLI stock with outstanding RLI long-term debt at cost or conversion price whichever is higher) with the forward market rate on debt outstanding on the outstanding long-term debt. Should preferred stock or any new capital be issued, the appropriate cost will be blended with existing capital View More
Found in RLI Corp. contract
The Blended Cost of Capital. The weighted average of the cost of equity capital and the cost of debt capital
Found in RLI Corp. contract
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