1. Suppose that you are trying to extract a capitalization rate from the market. You have obtained three comparable properties that have sold recently. Property #1 had a net operating income of $200,000 and sold for $1.6 million. Propery #2 had an NOI of $300,000 and sold for $2.1 million. Property #3 had an NOI of $400,000 and sold for $3.6 million. What is the market capitalization rate implied by these tranactions if you decide to weight all three comparables equally?

a. 12.6%

b. 12.2%

c. 11.1%

d. 7.9%

2. The company cost of capital for a firm with a 75/25 debt/equity split, 7% cost of debt, 15% cost of equity, and a 30% tax rate would be:

A. 7.43%.

B. 8.63%

C. 9.00%.

D. 13.80%.