Question

1.According to NAREIT, REIT stocks correlation with the S&P 500 during the period from 1980 through...

1.According to NAREIT, REIT stocks correlation with the S&P 500 during the period from 1980 through 2010 was 0.55. If the S&P 500 gained 10% during this period, what is the expected gain in REIT stocks?

1.

5.5%
2.

5.0%
3.

4.5%
4.

10%

2.

By law, REITs are required to distribute 90% of their pretax income to shareholders. REITs are not taxable but shareholders are. If a REIT pays out a dividend of $1,000 and the shareholder has a tax rate of 40%, what is the after tax return to the shareholder?

1.

$400
2.

$600
3.

$1,000
4.

$950

3.

REITs are required to have at least what % of its assets invested in real estate, mortgage loans and shares in other REITs?

1.

70%
2.

75%
3.

80%
4.

90%

4.REITs are required to derive at least what % of gross income from rents, mortgage interest, or gains from the sale of property?

1.

65%
2.

75%
3.

95%
4.

100%

5.If the value of a property is $10M, and the NOI is $450K, what is the implied cap rate?

1.

3.5%
2.

4.0%
3.

4.5%
4.

5.0%

6.If a property has an NOI of $600K, and a comparable property traded at a 5% cap rate, what is a reasonable estimate of the property's value?

  1. 1.

    $12M
    2.

    $10M
    3.

    $8M
    4.

    $14M

7.The REIT Modernization Act enabled REITs to own a taxable subsidiary. This enabled the REIT's to engage in what for-profit activities?

1.

Merchant property development
2.

Fee brokerage
3.

Telecom and broadband
4.

All of the above.
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

1.

Correlation = 0.55

S&P 500 gained by 10%

REIT gain = 0.55(10)

REIT Gain = 5.5%

2.

Dividend = $1000

After tax dividend = (1 - 0.40)1000

After tax dividend = $600

3.

Option B is correct

75%

Explanation:

REIT needs to invest atleast 75% of its assets invested in real estate, mortgage loans and shares in other REIT.

4.

Option B is correct

75%

Explanation:

REIT needs to have 75% of gross income from rents, mortgage interest, or gains from the sale of property

5.

Cap Rate = 450000/10000000

Cap Rate = 4.5%

Option C is correct

6.

Value of Property = 600,000/0.05

Value of Property = $12M

7.

Option A is correct

Merchant property development

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. REITs are stocks True False 3. REIT shares can be bought by any investor, just...
1. REITs are stocks True False 3. REIT shares can be bought by any investor, just like any share of stock True False 4. What does REIT stand for? Regulated Earnings Investment Total Real Estate Income Tax Real Estate Investment Trust Real Earnings Investment Trust 2. REITs are fixed income securities True False
1. One advantage of Adjustable Rate Mortgages (ARM) is that a. lenders face lower levels of...
1. One advantage of Adjustable Rate Mortgages (ARM) is that a. lenders face lower levels of interest rate risk than a fixed rate mortgage. b. the outstanding loan balance can be adjusted regularly. c. the default risk of borrowers is lower than under a fixed rate mortgage. d. All of the above. 2. Gilbert takes out a 23-year adjustable rate mortgage loan for $6,000,000 with monthly payments. The first two years of the loan have a “teaser” rate of 2%,...
1. The correlation between the Freedom Equity Fund and the S&P 500 index is 1. The...
1. The correlation between the Freedom Equity Fund and the S&P 500 index is 1. The expected return on the S&P 500 index is 10%, and the required return on the Freedom Equity Fund is 8%. The risk free return in the U.S. is 3%. Based on this information, the implied beta of the Freedom Equity Fund is: A).       0.8                   B).       0.7 C).       0.6                   D).       0.5       E).        0.9 2. A firm issues bonds of $550 million, repays bank loans...
2 . Identify which of the following statements is true: If an S Corporation has no...
2 . Identify which of the following statements is true: If an S Corporation has no accumulated earnings and profits, the amount distributed to a shareholder will not increase the shareholder's basis in the stock        If a C Corporation does not distribute its income to its shareholders, double taxation of the income will occur.        C Corporation operating losses are deductible by the individual shareholders        S Corporation operating losses are never deductible by the individual...
Multiple Choice Questions \Indicate the best answer in the space provided 1. The difference between regulations...
Multiple Choice Questions \Indicate the best answer in the space provided 1. The difference between regulations and revenue rulings is that _____ a. Revenue rulings are not limited to a given set of facts and regulations are limited b. Revenue rulings are the direct law-making powers of Congress and regulations are not c. Revenue rulings require approval by the Secretary of the Treasury; regulations do not d. Revenue rulings do not have the authority of regulations; regulations are a direct...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT