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David is buying a property for $800,000 including any fees and stamp duties. He is borrowing $600,000 at an effective interest rate of 4% per

David is buying a property for $800,000 including any fees and stamp duties. He is borrowing $600,000 at an effective interest rate of 4% per annum. In the first year the return on assets for the property is 10%. Using a similar approach to the one used under the 'Financial Leverage' section of the lecture, calculate his return on equity in the first year as a percentage (to the nearest percentage point)

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