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A REIT Has Expected Total Return on Equity of 15

Question 10

Multiple Choice

A REIT has expected total return on equity of 15%, interest on their debt is 9%, and their debt-to-total-value ratio is 40%. What is the REIT's average cost of capital?


A) 9.0%
B) 10.4%
C) 12.6%
D) 15.0%
E) Insufficient information to answer this question.

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