Finance 4500 Exam 3 Ch 17

Assume the following information for an equity REIT: Funds from operation: $4,000,000; current stock price: $40; total shares outstanding: 1,000,000. What is the price-FFO multiple? A) 10.0 B) 0.10 C) 0.25 D) 4.00

A) 10.0

With regards to taxation, (can select multiple) A) REITs are similar to C corporations in that there is separation of ownership and control B) REITs are similar to S corporations, in that they experience no "double" taxation C) REITs are similar to real estate limited partnerships in that the REITs's management team is potentially subject to unlimited liability D) REITs are similar to real estate limited liability companies, in that they provide limited liability for all investors

A) REITs are similar to C corporations in that there is separation of ownership and control B) REITs are similar to S corporations, in that they experience no "double" taxation D) REITs are similar to real estate limited liability companies, in that they provide limited liability for all investors

Which of the following best describes the type of investors typically most willing to contribute their properties, currently owned in the form of a limited liability company, to an UPREIT? A) investors who would not face large capital gain taxes if they engaged in a regular taxable sale B) investors who would face large capital gain taxes if they engaged in a regular taxable sale C) investors seeking real estate investments with more growth potential

B) investors who would face large capital gain taxes if they engaged in a regular taxable sale

The primary investment strategies of REITs are to acquire properties directly or: A) create comingled funds B) develop land C) buy or originate mortgage loans D) invest in the stocks of other real estate companies

C) buy or originate mortgage loans

Assume the following information for a publicly-traded REIT: Net (accounting) income: $44,245,000; Gain/losses from infrequent and unusual events: $50,000; Amortization of tenant improvements: $575,000; Amortization of leasing expenses: $133,000; depreciation (real property): $30,906,000. Calculate the REIT's funds from operation (FFO). A) $75,909,000 B) $75,859,000 C) $12,581,000 D) $75,809,000

D) $75,809,000