Question: In class we talked about the inverse relationship between cap rates and values. The lower the cap rate, the higher the value. Assume a real

 In class we talked about the inverse relationship between cap rates

In class we talked about the inverse relationship between cap rates and values. The lower the cap rate, the higher the value. Assume a real estate company pursues a develop-to-sell strategy. This is to say that the company acquires land, develops a building on it, and then leases it up so that its un-leveraged yield on cost is 7%. At the time of sale, at what disposition cap rate will it make the most money? O 8% O 7% O 6% O 5%

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