Real Estate Math
An Ohio investor's property has a net operating income of $42,000 and an annual debt service of $30,000. What is the 'equity dividend' if the investor's equity position is $140,000?
A7.5%
B8.6%✓ Correct
C8.8%
D9.0%
Explanation
Cash flow (equity dividend) = NOI − Debt Service = $42,000 − $30,000 = $12,000. Equity dividend rate = $12,000 / $140,000 = 8.
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