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What conclusions can you draw about the relationship

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Question - Consider what happens to the market valuation component if we consider changes in the debt capital market. The Loan-to-Value ratio was originally set at 70%, with a 5.5% interest rate amortized over 25 years. Now, assume the Sample Inn can secure a mortgage with a Loan-to-Value ratio of only 65%, with a 5.75% interest rate amortized over 20 years. Accounting for these changes, what does this do to the market valuation for the Sample Inn? What conclusions can you draw about the relationship between the debt capital market and hotel valuations?

Reference no: EM132499139

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