The rate of interest on an interest only permanent loan for a commercial property is 5%. The value of the property is $5,000,000 and the current net operating income is $375,000. The lender indicates that she requires a DSCR or DCR of 1.7 and an LTV of 75%. What is the allowable loan based on the DCR or DSCR? Please round your answer to the nearest whole number.

Question 20Select one:

a.

$3,750,000

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b.

$4,250,000

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c.

$4,411,765

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d.

None of the above

Assume that a loan of $4,000,000 is negotiated with the lender for the property in Question above, Compute the WACC for the property given the capital stack. Express your answer as a percentage with two decimal places.

Question 21Select one:

a.

5.50%

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b.

5.75%

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c.

5.4%

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d.

None of the above