1. The difference between the net operating income (NOI) and the equity before-tax cash flow (EBTCF) is:
Property Tax Expense and capital expenditures.
The debt service and capital expenditures.
Property taxes and income taxes.
Interest expense and depreciation expense.
2. A REIT has expected total return on equity of 15%, interest on their debt is 9%, and their debt-to-total-value ratio is 50%. What is the REIT’s average cost of capital?
12.0%
13.4%
12.6%
12.3%