Property Valuation
In New York, the 'band of investment' capitalization rate development technique considers:
AOnly the equity investor's return requirement
BThe weighted average of the mortgage constant and the equity dividend rate based on the financing structure✓ Correct
CThe risk-free rate only
DThe property's tax assessment
Explanation
The band of investment technique develops a cap rate as the weighted average of the mortgage component (loan-to-value ratio × mortgage constant) and the equity component (equity-to-value ratio × equity dividend rate), reflecting the blended return requirements of both lenders and investors.
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