The Advantage for Both Commercial Landlords and Tenants Using a Percentage

question 14

True/False

The advantage for both commercial landlords and tenants using a percentage rent approach with a breakpoint is that the landlord can share in the tenant's success while the tenant pays a lower rental fee until its sales hit a predetermined level.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with fixed dividend payments.

Common Equity

The amount of money that would be returned to shareholders if all the assets were liquidated and all the company's debt was paid off.

Pre-Tax Basis

An evaluation or measure made before taxes are deducted.

Marginal Cost

The change in total cost that arises when the quantity produced is incremented by one unit.