Lecture
This lecture explores the concepts of debt and equity in real estate financing, discussing how loans contribute to property acquisition and the fluctuation of equity. It delves into the characteristics of bonds and stocks, highlighting the obligations and benefits for both debtors and shareholders. The lecture also covers the leverage effect, illustrating how leveraging can amplify profits but also increase risks. Additionally, it analyzes the determinants of return on equity, emphasizing the impact of debt ratio and interest rates. Practical examples and calculations are provided to demonstrate the implications of different financing strategies on investment returns.