Unleveraged returns you plan to invest 10000 in a security, Ask an Expert

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(Unleveraged returns) You plan to invest $10,000 in a security, borrowing $6,000 of the cost from a friend, thus putting up $4,000 of your own money. The cost of debt is 12%, and there are no taxes. With this arrangement, you expect a return of 20% on your equity investment. What would your return be without the leverage? That is, what would your return be if the entire $10,000 was your own money?

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Financial Management, Finance

Category:- Financial Management
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