Certain real estate limited partnership advertises

Assignment Help Business Economics
Reference no: EM133227546

Question

A certain real estate limited partnership (LP) advertises that it has a target of matching the stock market in total return for its limited partner investors, before taxes. (Suppose that the stock market expected return is 9%.) The conservative office and warehouse properties that the partnership plans to acquire typically have before-tax expected returns of about 6%. Assuming mortgage debt at the rate of 3%, what loan-to-value ratio must the LP plan to maintain in its property investments in order to have a good chance of meeting its stated target?

Reference no: EM133227546

Questions Cloud

Corporate social responsible act : When managers initiate philanthropy, the Corporate Social Responsible act can decrease firm value due to what reasons:
Financial management: bonds and stocks : A company plans on taking out real estate loan of $10 Million on its distribution center. Compute the bond's market value today?
Liquidity management policy pursued by individual banks : To what extent does the Central Bank of USA dictate the liquidity management policy pursued by individual banks to ensure the soundness of the banks
What is after-tax cost of the common stocks : What is the after-tax cost of the bonds? What is the after-tax cost of the preferred stocks? What is the after-tax cost of the common stocks?
Certain real estate limited partnership advertises : A certain real estate limited partnership (LP) advertises that it has a target of matching the stock market in total return for its limited partner investors,
Diversification is important to mitigate investment : Diversification is important to mitigate the investment, risk, therefore you do not need to invest in a similar kind of stock.
Profit-oriented and microfinance institutions : Compare and contrast 'profit-oriented ' microfinance institutions' and 'charitable' microfinance institutions. In your opinion which type is sustainable?
Discuss various characteristics of micro entrepreneurs : Discuss the various characteristics of micro entrepreneurs and categorise their requirements for various products and services according to their financial stat
Find present value of special annuity : A special annuity makes payments at the beginning of the year. Find the present value of this special annuity if i = 0.062.

Reviews

Write a Review

Business Economics Questions & Answers

  Which should encourage employment

A December 2007 issue of The Economist contained the following quote in an article about Germany: "The government has just chopped the payroll tax that finances unemployment insurance, which should encourage employment." Comment on this statement,..

  Identify about a dozen combinations

In the equation of exchange, suppose V is stable (constant) with a value of 4, andthe money supply is $200 billion. What combinations of P and Y are possible? Identify about a dozen combinations, and plot them on a graph. Does your graphlook like an ..

  What sample size should they use

To estimate the BMI with an error of at most 0.5 at a 95% confidence level, what sample size should they use? The standard deviation based on available hospital

  Explore one of sophisticated alternative pricing techniques

Explore one of the sophisticated alternative pricing techniques (i.e. price discrimination, price bundling, etc.) and provide an example of how it is used. What are some constraints that may limit the ability of firms to use these techniques?

  Percentage change in nominal gdp

Calculate the percentage change in nominal GDP, real GDP also the GDP deflator in 2002 also 2003 from the preceding year.

  What is a difference between fiat and commodity money

What is a difference between fiat and commodity money?

  What determines which goods a country should produce

What determines which goods a country should produce and export? What is the World Trade Organization (WTO) and how does it help foster multilateral trade?

  What is the current price of the bond

Assume that a bone makes 30 annual payments of $1000 starting one year from today. If the discount rate is 3.5% per annum what is the current price of the bond?

  What is the present discounted value

What is the present discounted value of $1210 that is paid in two years if the interest rate is 10%?

  What are the potential implications of globalization without

What are the potential implications of globalization without consideration of cultural differences on ethical issues?  Cite specific examples.

  The bank of japan allowed the money supply

Assume the Bank of Japan allowed the money supply to grow by 2% each year while the Bank of Korea chose to maintain relatively high money growth of 12% per year.

  Name two advantages of the behavioral model

Name two advantages of the behavioral model.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd