A USD25 million equity portfolio is financed 20 percent with debt at a cost of 6 percent

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A USD25 million equity portfolio is financed 20 percent with debt at a cost of 6 percent annual cost. If that equity portfolio generates a 10 percent annual total investment return, then the leveraged return is:

A. 11.0 percent.

B. 11.2 percent.

C. 13.2 percent

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2024 CFA Program Curriculum Level I Volume 1

ISBN: 9781953337672

1st Edition

Authors: CFA Institute

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Question Posted: Feb 01, 2024 08:30 AM

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A USD25 million equity portfolio is financed 20 percent with debt at a cost of 6 percent

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2024 CFA Program Curriculum Level I Volume 1

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