An investment opportunity having a market price of $1,000,000 is available. You could obtain a $750,000, 25-year

Question:

An investment opportunity having a market price of $1,000,000 is available. You could obtain a $750,000, 25-year mortgage loan requiring equal monthly payments with interest at 7.0 percent. The following operating results are expected during the first year.
Effective gross income ........... $200,000
Less operating expenses and CAPX ......... $100,000
Net operating income ............. $100,000
For the first year only, determine the:
a. Gross income multiplier
b. Operating expense ratio (including CAPX)
c. Monthly and annual payment
d. Debt coverage ratio
e. Overall capitalization rate
f. Equity rate

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...