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What is ann return on equity in year 1

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Reference no: EM132686945

Ann purchased a property for $1,000,000. She bought the property at a 7.00% cap rate.

She finances the purchase with an Interest Only senior loan at 60% LTV at an interest rate of 4.00%.

She also decides to get subordinate / mezzanine financing for 20% of the capital stack (from 60%-80% LTV) at 8.00% interest only.

What is Ann's return on equity (ROE) in year 1?

Reference no: EM132686945

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