Home /
Expert Answers /
Finance /
which-condition-guarantees-that-levered-return-is-higher-than-the-unlevered-return-the-commercial-pa393
(Solved): Which condition guarantees that levered return is higher than the unlevered return? The commercial ...
Which condition guarantees that levered return is higher than the unlevered return? The commercial property has a high cap rate Interest rate for the debt if low The peroperty investment is not risky The interest rate on the debt is below the cap rate
Expert Answer
To guarantee that the levered return is higher than the unlevered return, the interest rate on the debt must be below the cap rate. The cap rate is a