Which Statement Is True Ex Ante

question 7

Multiple Choice

Which statement is true ex ante?

• A) Leverage normally increases the owner's income return cash yield) if you pay market value for the property.
• B) Leverage normally increases the owner's income return cash yield) if you pay more than market value for the property.
• C) Leverage normally increases the owner's total return including appreciation) if you pay market value for the property.
• D) Leverage normally increases the owner's total return including appreciation) if you pay more than market value for the property.

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Definitions:

Security Fee

A charge imposed to cover the cost associated with ensuring the safety and security of a service or facility.

Federal Income Tax

A tax levied by the federal government on individuals' and corporations' yearly income.

Payroll Tax

Taxes imposed on employers and employees, typically calculated as a percentage of the salaries that employers pay their staff.

Benefits Principle

A tax principle stating that those who benefit from government services should pay in proportion to the amount they benefit.