Alt Investments Question - Qbank investment, financing, property, mortgage, recent

noel

Consider a real estate investment that is 35% debt financed and 65% equity financed. The total mortgage cost for this property is 10% and the cost of equity financing is at a recent high of 13%. The capitalization rate for this investment as determined using the band-of-investments method is closest to:

A. 11.80%
B. 11.95%
C. 12.85%