Find out the financing choice for each type of investor

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Reference no: EM132031649

If total return after tax on a certain project is 7.5% and there are 5 financing choices available to investors:

1) 7% interest rate and 60% LTV ratio

2) 7.8% interest rate and 70% LTV ratio

3) 8.5% interest rate and 80% LTV ratio

4) 9.25% interest rate and 90% LTV ratio

5) 9.75% interest rate and 95% LTV ratio

Supposed that there are 3 types of investors (A, B, C) whose tax rates are 15%, 25%, and 35% respectively

1) find out the financing choice for each type of investor and the corresponding after-tax return on equity

2) Which type of investor has the highest after-tax return on their equity?

Reference no: EM132031649

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