-Using the Information from the Question Above, What Would Be

question 21

Multiple Choice

$\begin{array}{rrr}\begin{array}{l}\\\text { NOI } \\\text { DS } \\\text { Cash flow } \\\text { Resale in year } 3 \\\text { Less mortgage balance } \\\text { Total cash flow } \\\text { Present value of cash flow @ } 15 \%\end{array}\begin{array}{rrr}\text { Year 1 } & \text { Year 2 } & \text { Year 3 } \\\$ 72,000 & \$ 74,880 & \$ 77,875 \\60,000 & 60,000 & 60,000 \\\hline \$ 12,000 & \$ 14,880 & \$ 17,875 \\& & 900,000 \\& & -435,000 \\\hline \$ 12,000 & \$ 14,880 & \$ 482,875 \\\$ 10,435 & \$ 11,251 & \$ 317,498\end{array}\end{array}$
-Using the information from the question above, what would be the equity dividend rate?

• A) 2.4 percent
• B) 3.5 percent
• C) $12,000
• D) $317,498
• E) Not enough information

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Definitions:

Non-Controlling Interest

A share in the equity of a subsidiary not owned by the parent company, also known as minority interest.

Control Premium

An additional amount paid over the fair market value for a controlling interest in a company.

Non-Controlling Interest (NCI)

Equity interest in a subsidiary not attributable to the parent company, reflecting the minority shareholders' stake in the subsidiary's net assets.

Consolidated Balance Sheet

A financial statement showing the total assets, liabilities, and equity of a parent company and its subsidiaries as if they were a single entity.