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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
For questions 26-30, use the following case:
Property price:Â Â Â Â $4,750,000
Debt financing:    Interest only loan (payment includes no amortization)     Rate of 5.0 percent     Amount: $3,000,000Ac€A?
Going-outAc€?? cap rate in 5 years: 6.7 percent
InvestorAc€?cs required yield, unlevered: 8 percent
InvestorAc€?cs required yield, levered: 10 percent Â
PGI (Yrs 1-6): 625,000, 625,000, 625,000, 625,000, 625,000, 680,000
Vacany & Collection Loss (yrs 1-6): 35,000, 35,000, 35,000, 35,000, 35,000, 41,000
Operting Expense (yrs 1-6): 250,000, 250,000, 250,000, 250,000, 250,000, 275,000
Cap. Expenditures (yrs 1-6): 25,000, 25,000, 25,000, 25,000, 25,000, 30,000
26. What is the overall rate of capitalization, Ac€A?going inAc€???
27. What is the equity dividend rate?
28. What is the debt coverage ratio?
29. What is the unlevered IRR for a holding period of 5 years?
30. What is the levered NPV for a holding period of 5 years?
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