Why could the risk of equity cash flows be higher with more leverage?

a$.$ Due to leverage, the lender is entitled to the first cash flows

b$.$ Due to the equity structure, the lender is entitled to the first cash flows

c$.$ Due equity, the lender is entitled to the last cash flows

d$.$ Leverage does not increase the risk of equity cash flows because the equity controls the NOI

When looking at an equity IRR, you need to evaluate whether the returns are being driven by:

a$.$ Strong property cash flows

b$.$ Extreme leverage

c$.$ Extreme operating risk

d$.$ All of these

What IRR assumption$($s$)$ is$/$are inaccurate for many investments?

a$.$ IRR assumes that the appropriate risk$-$adjusted rate of return is the same for every year

b$.$ IRR assumes that the appropriate risk$-$adjusted rate of return is different for every year

c$.$ IRR assumes reinvestment of cash flows at the IRR

d$.a$&$c$

You can generate $$ IRRs with two very different cash flow stream profiles.

a$.$ Only different

b$.$ Different or the same

What happens if a property with an interest$-$only loan is not sold by the time the loan term expires?

a$.$ The loan will have to be refinanced either by a new loan or an equity infusion upon maturity

b$.$ The loan will have to be forgiven by the lender

c$.$ The borrower will be forced to give the property to the lender

d$.$ All of these

The payment of debt service in interest$-$only loans is reflected in what?

a$.$ NOI and Before$-$tax cash flows

b$.$ Before$-$tax cash flows and After$-$tax cash flows

c$.$ All of these

d$.$ None of these

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