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Question
An investment has the following characteristics:
ATIRRP: After-tax IRR on total investment in the property: 9.0%
BTIRRE: Before-tax IRR on equity invested: 17%
BTIRRP: Before-tax IRR on total investment in the property: 12%
t: Marginal tax rate: 0.40
What would be the break-even interest rate (BEIR), at which the use of leverage is neither favorable nor unfavorable?
A) 15.0%
B) 20.0%
C) 22.5%
D) 28.3%
Answer
This answer is hidden. It contains 19 characters.
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