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Question 8 1 pts You are analyzing two different loans to finance the purchase of a multi-family residential property. The first loan has a rate
Question 8 1 pts You are analyzing two different loans to finance the purchase of a multi-family residential property. The first loan has a rate of 5% with a maximum LTV of 65% and the second loan has a rate of 7% with a maximum LTV of 75%. The marginal rate when comparing the second loan to the first loan is 18%. Your tax rate is 35% and the property has an ATIRR of 10% when analyzed as an all-cash purchase. Please select two statements below that reflect the impact of the use of leverage on the ATIRR of levered equity. The expected ATIRR of levered equity will be higher than 10% if the 65% loan is used to purchase the property. The expected ATIRR of levered equity will be lower than 10% if the 65% loan is used to purchase the property. The expected ATIRR of levered equity will be higher than 10% if the 75% loan is used to purchase the property. The expected ATIRR of levered equity will be lower than 10% if the 75% loan is used to purchase the property
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