A REIT with 100 Shares Outstanding Earns $1,000 in Rent

question 24

Multiple Choice

A REIT with 100 shares outstanding earns $1,000 in rent and incurs operating expenses of $400.In addition,the REIT owns property with an historic cost of $6,000 and depreciates it over a 15 year period using straight-line depreciation.What are the funds from operations per share and the earnings per share for this REIT?

• A)$4 and $3,respectively
• B)$4 and $2,respectively
• C)$6 and $2,respectively
• D)$6 and $3,respectively

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Definitions:

Insurance

A financial product that provides protection against potential financial losses or liabilities arising from specific risks.

Risk Averse

Describes individuals or entities that prefer to avoid risk and would rather choose options with more certain outcomes over riskier ones.

Insurance

A financial product that provides protection against potential future losses or damages in exchange for a premium.

Risk Neutral

A condition in which an individual or entity shows indifference between choices that have different levels of risk, focusing solely on potential outcomes regardless of uncertainty.