a. 14. It is the spread between the investment return and the cost of capital, adjusted for risk, that's most important for investors, not just the absolute levels of capital costs or investment returns. In other words, value creation can be defined as the positive difference between the true cost of capital and the long-term return obtained from the use of that capital, discounted to net present value (NPV). It can be manifested in higher income and/or greater net asset values (NAVs). This concept is appropriate for all business enterprises. True or False? a. True b. False 15. What does a strong balance sheet look like for a REIT? a good amount of debt relative to a REIT's total market cap, to the total market value of its assets, or to earnings before interest costs, income taxes, and depreciation and amortization expenses (EBITDA) b. weak coverage of the interest payments on that debt, and other fixed charges, from operating cash flows c. a manageable debt maturity schedule. d. All of the above 16. How much debt leverage is acceptable in a blue-chip REIT? a. Anything over a 55 percent debt/total market cap ratio makes many REIT investors uncomfortable, particularly in the more volatile sectors, such as hotels, where cash flows are not protected by long-term leases (x