Why do investors use Price/FFO instead of Price/Earnings ratio to value a REIT? Based on your answer and given the following information, calculate the price-FFO multiple for the following REIT. Net income: $1,200,000, Gainlosses from infrequent and unusual events: $0, Amortization of tenant improvements: $120,000, Amortization of leasing expenses: $75,000, Depreciation (real property): $2,675,000. Stock Price: $40; Market Capitalization: $40,000,000

Why do investors use Price/FFO instead of Price/Earnings ratio to value a REIT? Based on your answer and given the following information, calculate the price-FFO multiple for the following REIT. Net income: $1,200,000, Gainlosses from infrequent and unusual events: $0, Amortization of tenant improvements: $120,000, Amortization of leasing expenses: $75,000, Depreciation (real property): $2,675,000. Stock Price: $40; Market Capitalization: $40,000,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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calculate using formulas, no tables: correct answer: NPV(9%) = 32.75103 - 28.53393 = 4.217107
Lawrence Corp. is considering the purchase of a new piece of equipment. When discourtaed at a hurde rete l te project hant etw of $24,58O, When discounted at a hurdie rate of 10%, the project has a net present value of ($28340), The intemal rate of retum d te pis Multiple Choice zero. between zero and 8% between 8% and 10% greater than 10% Next> 18 of 20 # ( Prev lulook Air
4
A builder is offering $131,554 loans for his properties at 9 percent for 25 years. Monthly payments are based on current market rates of 9.5 percent and are to be fully amortized over 25 years. The property would normally sell for $140,000 without any special financing. Required: a. At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan? Assume that the buyer would have the loan for the entire term of 25 years. b. At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan if the property is resold after 10 years and the loan repaid? Complete this question by entering your answers in the tabs below. Required A Required B At what price should the builder sell the properties to earn, in effect, the market rate of interest on the loan? Assume that the buyer would have the loan for the entire term of 25 years. (Do not round intermediate calculations. Round your final answer to the…
How to solve a problem when they give you the liability amount $120000 and the equity $232k and they ask to fund the total assets?
You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of dollars) of its profits and of its future investments in new plant and working capital: Earnings before interest, taxes, depreciation, and amortization (EBITDA) Depreciation Pretax profit Tax at 30% Investment 1 $ 73 33 40 12 19 a. Total value b. Laputa's equity Year 2 $93 43 50 15 22 3 $ 108 48 60 18 25 4 $ 113 53 60 18 27 From year 5 onward, EBITDA, depreciation, and investment are expected to remain unchanged at year-4 levels. Laputa is financed 60% by equity and 40% by debt. Its cost of equity is 18%, its debt yields 9%, and it pays corporate tax at 30%. a. Estimate the company's total value. Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole amount. b. What is the value of Laputa's equity? Note: Do not round intermediate calculations. Enter your answer in millions rounded to the nearest whole amount.
What is the internal rate of return for this rental condominium investment?
Subject :- Accounting
Subject - account
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