Thank you for making this article available. With real estate investments, we call ROIC>WACC
Positive Leverage (cost of borrowing is less than the CAP rate or reverse of P/E). Think of a bank with the ability to borrow from the FED at a discount rate of say 2% and buy US Treasuries that yield 4%.
Thank you for making this article available. With real estate investments, we call ROIC>WACC
Positive Leverage (cost of borrowing is less than the CAP rate or reverse of P/E). Think of a bank with the ability to borrow from the FED at a discount rate of say 2% and buy US Treasuries that yield 4%.
Thank you for making this article available. With real estate investments, we call ROIC>WACC
Positive Leverage (cost of borrowing is less than the CAP rate or reverse of P/E). Think of a bank with the ability to borrow from the FED at a discount rate of say 2% and buy US Treasuries that yield 4%.
Thank you for your message, Mike. This concept is very relevant in real estate too!