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Ann purchased a property for $1,000,000 at a 7% cap rate. She finances the purchase with an interest only senior loan at 60% LTV at

Ann purchased a property for $1,000,000 at a 7% cap rate.

She finances the purchase with an interest only senior loan at 60% LTV at an interest rate of 4%

She also decides to get subordinate/mezzanine financing for 20% of the capital stack (from 60-80% LTV) at 8% interest only. What is Ann's return on equity (ROE) for year 1?

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