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A property is financed with a 75 percent loan at 11.5 percent over 25 years. The property produces an ATIRR on total investment of 7.34
A property is financed with a 75 percent loan at 11.5 percent over 25 years. The property produces an ATIRR on total investment of 7.34 percent based on a tax rate of 31 percent. What can be said about the leverage associated with the property?
Negative Leverage Exists
Positive Leverage Exists
No Leverage Exists
Leverage cannot be determined without knowing the ATIRR on equity
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