Jerry wants to calculate the NAVPS for REIT 1. Exhibit 1 present the selected financial data for REIT 1.

Exhibit 1

Selected Financial Data for REIT 1

Arnold gathers the following information about two companies in the same industry:

What is the most appropriate conclusion regarding investors’ expectations? Compared to Company B, Company A has:

Using the discounted cash flow method, estimate the property value

of a building with

the following information: 

NOI for next six years $650,000 

NOI in year 6 $720,000 

Holding period 6 years 

Discount rate 10% 

Terminal growth rate 3%

Agnes collects the following data on the return on equity (ROE) and the payout ratio for two companies, M and N. Using a required return of 12.4% for both companies, she computes the justified forward P/E ratios, which are also given below:

If Company M increases its dividend payout ratio to 40% and Company N decreases its dividend payout ratio to 30%, which of the following will most likely occur? The justified forward P/E ratio of…………………

The following statements are related to residual income : 

1. Persistent factor range from 0-1

2. Using 0 persistent factor will generate the same result with the assumption that company cease to exist in the terminal period 

3. Persistent factor equals to 1 means that company's ROE will be the same with its cost of equity at the terminal period

4. Persistent factor above 0.62 means the assigned company is below the industry average

Which of the following statement(s) is or are true?

Investors seeking broad diversification would invest in the securities of

which of the following companies?

We assign high residual income persistence factor for the following company, except..........................

Company A has higher ROE but lower growth than Company B. The appropriate reason for this statement will be...............

Vio just finished her income statement forecast for PT ABC. She wants to forecast the company's balance sheet, starting with forecasting its inventory. She notices that historically, the inventory turnover and the gross profit margin is relatively stable. The sales growth is a bit fluctuated from time to time because of the competition in the industry. What will be the best ratios to forecast the inventory?

To estimate FCFF, we could use below formulas, except………….