A REIT Has an NOI of $15 Per Share and Currently

question 35

Multiple Choice

A REIT has an NOI of $15 per share and currently pays a dividend of $10 per share.The dividend is projected to increase by 4 percent by next year and continue to increase by 4 percent per year thereafter.Assuming that the blended cap rate is 9.75 percent and the required rate of return is 10.5 percent,what would the net asset value (NAV) of the REIT be?

• A)$60.15
• B)$71.89
• C)$153.85
• D)$160.00

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Definitions:

Intangible Assets

Non-physical assets that have value due to their intellectual or contractual rights, such as patents, trademarks, copyrights, and goodwill.

Company Reputation

The public perception of a company, influenced by its actions, reliability, product quality, and ethics.

Cost of Land

The price paid for a piece of land, including purchase price, closing costs, and any improvements necessary to make the land usable.

Land Improvements

Enhancements made to land such as landscaping, fencing, and lighting that increase its value, excluding the cost of the land itself.