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8. Syndicate investors in a portfolio of warehouse properties desire a 7% risk premium but the conservative warehouse investment within the portfolio are expected to

8. Syndicate investors in a portfolio of warehouse properties desire a 7% risk premium but the conservative warehouse investment within the portfolio are expected to yield a risk premium of 3%. Assuming riskless debt, what LTV ratio must the syndicate managers use to obtain the 7% RP?

Now assume the risk-free interest rate is 5% and the debt has an interest rate of 7%.

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