Return objective for Endowment

If the case gives the distribution goal (say 4.5%), and the minimum payout (4%) to maintain tax exempt. Also given are management fee (say 0.5%).

It ask you to compute the return objective.

In this case, do you compute for both 4.5% and 4% and state one is desired and one is the minimum? Is it necessary?

On a real exam, is the goal based on 4.5% solely enough?

I wouldn’t waste time giving two answers and justifying which one is correct when they only asked for one.

For this question I’d go with 4.5% distribution goal + 0.5% mgmt fee = 5% return requirement. Add inflation if given.