Consider the sale for which the lender quoted a mortgage capitalization rate at 9.0%. If the equity capitalization rate is 15.0%, and the loan-to-value ratio is 80.0%, what is the overall capitalization rate?   A.   10.2%   B.   13.9%   C.   24.0%   D.   The answer cannot be determined without the term of the mortgage.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Consider the sale for which the lender quoted a mortgage capitalization rate at 9.0%. If the equity capitalization rate is 15.0%, and the loan-to-value ratio is 80.0%, what is the overall capitalization rate?

 

A.

 

10.2%

 

B.

 

13.9%

 

C.

 

24.0%

 

D.

 

The answer cannot be determined without the term of the mortgage.

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