Given the following information, calculate the equity dividend rate for this investment. First-year NOI: $18,750, Before-tax cash flow: $11,440, Acquisition price: $520,000, Equity Investment: 20%.

Question

Quizplus · Accepted Answer

The equity dividend rate is calculated by dividing the before-tax cash flow by the equity investment. Here, the equity investment is 20% of the acquisition price, which is 20% of $520,000 = $104,000. The before-tax cash flow is $11,440. Therefore, the equity dividend rate is $11,440 / $104,000 = 0.11, or 11%.

Given the Following Information, Calculate the Equity Dividend Rate for This