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Question 39 (2.5 points) Which one best describes the use of positive leverage? For an all cash deal, you are making an equity contributing
Question 39 (2.5 points) Which one best describes the use of positive leverage? For an all cash deal, you are making an equity contributing of $1M to buy a $1M property making a 10% return. However, if you able to obtain a loan of $800K (at high interest rate terms) then your equity contribution is only $200K and making a lower return of 9% For an all cash deal, you are making an equity contributing of $1M to buy a $1M property making a 10% return. However, if you able to obtain a loan of $800K (at competitive low interest rate terms) then your equity contribution is only $200K and making a higher return of 18%. For an all cash deal, you are making an equity contributing of $1M to buy a $1M property making a 10% return. However, if you able to obtain a loan of $800K (at reasonable interest rate terms) then your equity contribution is only $200K and making a higher return of only 12%. For an all cash deal, you are making an equity contributing of $1M to buy a $1M property O making a 10% return. However, if you able to obtain a loan of $800K (at reasonable interest rate terms) then your equity contribution is only $200K and making a higher return of only 10%.
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