In a certain real estate market the net cash flows are level perpetuities no growth), the going-in IRR at the market price of the assets is 8% at the PBT level, and the marginal investors, who face an effective tax rate of 20% with or without leverage), typically use perpetual 50% LTV loans which are maintained perpetually at 50% LTV) that have a market interest rate of 6%. Ignoring depreciation, what is the market's levered after-tax opportunity cost of capital for these types of properties?

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The Answer of In a certain real estate market the net cash flows are level perpetuities no growth), the going-in IRR at the market price of the assets is 8% at the PBT level, and the marginal investors, who face an effective tax rate of 20% with or without leverage), typically use perpetual 50% LTV loans which are maintained perpetually at 50% LTV) that have a market interest rate of 6%. Ignoring depreciation, what is the market's levered after-tax opportunity cost of capital for these types of properties?

In a Certain Real Estate Market the Net Cash Flows