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Get college assignment help at uniessay writers Question 10 10 pts Consider a 27,000 SF shopping center where all tenants pay $20 per square foot, triple-net Reimbursable operating expenses are $90,000 and non-reimbursable operating expenses are only a management fee that is 3.0% of PGI. Based on these assumptions, how much would the investor pay (net) for operating expenses? $18,900 O $15,750 13,500 $9,450 $22,050 Sub No new data to save. Last checked at 4:06am

If Wild Widgets, Inc., were an company has a target debt-equity ratio of .80. The expected return on the market portfolio is 12 percent and Treasury bills currently yield 3.7 percent. The company has one bond issue outstanding that matures in 30 years, a par value of $2,000, and a coupon rate of 6.4 percent. The bond currently sells for $2,090. The corporate tax rate is 23 percent. all-equity company, it would have a beta of 1.15. The a. What is the company’s cost of debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) b. What is the company’s cost of equity? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the company’s weighted average cost of capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) 4.67 % Cost of debt a. Cost of equity 13.25% b. 9.44% WACC C.

Good Time Company is a regional chain department store. It will remain in business for one more year. The probability of a boom year is 60 percent and the probability of a recession is 40 percent. It is projected that the company will generate a total cash flow of $203 million in a boom year and $94 million in a recession. The company’s required debt payment at the end of the year is $128 million. The market value of the company’s outstanding debt is $101 million. The company pays no taxes. a. What payoff do bondholders expect to receive in the event of a recession? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g., 1,234,567.) b. What is the promised return on the company’s debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) c. What is the expected return on the company’s debt? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) a. Payoff 94,000,000 26.73% Promised return b. Expected return 57.82 % C.

Dickson, Inc., has a debt-equity ratio of 2. The firm’s weighted average cost of capital is 10 percent and its pretax cost of debt is 7 percent. The tax rate is 22 percent. a. What is the company’s cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) b. What is the company’s unlevered cost of equity capital? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g. 32.16.) c. What would the company’s weighted average cost of capital be if the company’s debt equity ratio were .50 and 1.00? (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) 19.08 % Cost of equity a. b. Unlevered cost of equity 11.72% WACC if debt-equity ratio 0.50 13.16 % C. WACC if debt-equity ratio 13.91 % 1.00

THE MBA DECISION Ben Bates graduated from college six years ago with a finance undergraduate degree. Although he is satisfied with his current job, his goal is to become an investment banker. He feels that an MBA degree would allow him to achieve this goal. After examining schools, he has narrowed his choice to either Wilton University or Mount Perry College. Although internships are aged by both schools, to get class credit for the internship, no salary can be paid. Other than internships, neither school will allow its students to work while enrolled in its MBA program. Ben currently works at the money management firm of Dewey and Louis. His annual salary at the firm is $65,000 per year, and his salary is expected to increase at 3 percent per year until retirement. He is currently 28 years old and expects to work for 40 more years. His current job includes a fully paid health insurance plan, and his current average tax rate is 26 percent. Ben has a savings account with enough money to cover the entire cost of his MBA program. The Ritter College of Business at Wilton University is one of the top MBA programs the country. The MBA degree requires two years of full-time enrollment at the university. The annual tuition is $70,000, payable at the beginning of each school year. Books and other sup- plies are estimated to cost $3,000 per year. Ben expects that after graduation from Wilton, he will receive a job offer for about $1 10,000 per year, with a $20,000 signing bonus. The salary at this job will increase at 4 percent per year. Because of the higher salary, his average income tax rate will increase to 31 percent. The Bradley School of Business at Mount Perry College began its MBA program 16 years ago. The Bradley School is smaller and less well known than the Ritter College. Bradley offers an accelerated, one-year program, with a tuition cost of $85,000 to be paid upon matriculation. Books and other supplies for the program are expected to cost $4,500. Ben thinks that he will receive an offer of $92,000 per year upon graduation, with an salary at this job will increase at 3.5 percent per year. His average tax rate at this level of income will be 29 percent. Both schools offer a health insurance plan that will cost $3,000 per year, payable at the beginning of the year. Ben also estimates that room and board expenses will cost $2,000 more ner vear at both schools than his current expenses, payable at the beginning of each year. The encour- $18,000 signing bonus. The appropriate discount rate is 4.7 percent. 1. How does Ben’s age affect his decision to get an MBA? 2. What other, perhaps nonquantifiable, factors affect Ben’s decision to get an MBA? 3. Assuming all salaries are from a strictly financial standpoint? 4. Ben believes that the appropriate analysis is to calculate the future value of each option. paid at the end of each year, what is the best option for Ben- How would you evaluate this statement? 5 What initial salary would Ben need to receive to make him indifferent between attending Wilton University and staying in his current position? 6. Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 4.3 percent. How would this affect his decision? 1. How does Ben’s age affect his decision to get an MBA? 2. What other, perhaps nonquantifiable, factors affect Ben’s decision to get an MBA? 3. Assuming all salaries are from a strictly financial standpoint? paid at the end of each year, what is the best option for Ben- 4. Ben believes that the appropriate analysis is to calculate the future value of each option. How would you evaluate this statement? 5. What initial salary would Ben need to receive to make him indifferent between attending Wilton University and staying in his current position? 6. Suppose, instead of being able to pay cash for his MBA, Ben must borrow the money. The current borrowing rate is 4.3 percent. How would this affect his decision?

Question 6 10 pts Regency Centers Corporation (REG), a neighborhood shopping centers REIT in Jacksonville, reports annual earnings of $1.37 per share, and had non-cash expenses (depreciation, amortization, etc.) of $0.72 per share. If the company pays out to shareholders the minimum 909% distribution rate, what is the dividend per share? O$1.68 O $1.88 $0.88 O $1.34 $1.48 Question 7 nsider dividend coverage from Funds from Operatie ncome?

At least 15% of their total investment must be in non-real-estate assets Question 5 10 pts Suppose that you are analyzing a REIT, and that you expect the company to have $3A50,000 in reportable net earnings. You also expect that the company to have $450,000 in non-cash expenses (depreciation, amortization, etc.). Assume that the company has 1 million shareholders and that it pays out 90% of its cash flow in dividends. What do you expect FFO per share to be? $4.50 $2.40 $3.90 $3.00 $3.40

Question 2 10 pts If an apartment building list rent at $1,300 per month but is offering two months free rent (on an annual lease) then what is the effective rent? $833 O $1,300 $1,250 O $1,080 $1,170 10 p Question 3 office building. Their lease started in 2014 at $16.00 pe se with a $5.20 expense st

Question 3 10 pts H

Question 4 10 pts A 14,000 square foot retail property just sold for $4.4 million. If the property is selling at a 7% cap rate with an absolute net lease (base rent NOI), then what is the rent per square foot? O $21.50 O $22.00 O $22.50 O $23.00 $23.50 10 Question 5

Get college assignment help at uniessay writers Question 5 10 pts Starbuck’s rents 2,200 square feet of a shopping center at $20 per foot triple-net. If Starbucks has a percentage rent clause at 3%, how much would they pay in percentage rent (additional rent) if they have sales of $1.5 million? $0 $1,000 $3,000 $5,000 $9,000 10 pts Question 6

Question 6 10 pts A 40,000 SF office property has reimbursable operating expenses of $240,000.One tenant, has a full service gross lease on 8,000 SF at $18.50 per foot with a $2.50 expense stop. What is their effective rent? $20.50 O $21.00 O $21.50 $22.00 $22.50 10 p Question 7 hie box” store space and develops these properties for an net) with $5 per foot in

Question 7 10 pts A national retailer uses 27,500 SF of “big box” store space and develops these properties for an average cost of $4.5 million. The space leases for $22 per foot (absolute net) with $5 per foot in operating expenses. If the company does a sale-leaseback, what is the approximate price (rounded to thousands) they can expect to get if the property is sold at a 6.25 cap rate? O $11,880,000 O $5,520,000 O $7,920,000 $6,828,000 $9,680,000 MacBook Air

Question 8 10 pts Consider an 18,000 SF shopping center where all tenants pay $21 per square foot, triple-net. Assume that operating expenses include real estate taxes of $56,000, insurance of $20,000, and CAM of $32,000. If a tenant requested full service gross (FSG) lease rather than a triple-net (NNN) lease, at what lease rate would the owner be indifferent between the two? $25.00 O $25.50 $26.00 O $26.50 $27.00 10 p Question 9

Question 9 10 pts Consider an 18,000 SF shopping center where all tenants pay $20 per square foot, triple-net. I gnore the general vacancy allowance, and assume that reimbursable operating expenses are $90,000 and non-reimbursable operating expenses are only a management fee that is 4.0% of PGI. What is the approximate value of this property at a 7.5% cap rate? $4,303,000 $3,442,500 $4,026,000 $3,775,000 $4,560,000 jon 10 e-net

Question 10 10pts Consider a 27,000 SF shopping center where all tenants pay $20 per square foot, triple-net Reimbursable operating expenses are $90,000 and non-reimbursable operating expenses are only a management fee that is 3.0% of PGI. Based on these assumptions, how much would the investor pay (net) for operating expenses? $18,900 $15,750 13,500 $9,450 $22,050

Martin Manufacturing has a policy that the ending cash balance in each month must j. be at least $4,000. It has a line of credit with a local bank. The company can borrow in increments of $1,000 at the beginning of each month, up to a total outstanding loan balance of $150,000. The interest rate on these loans is 1% per month simple inter- est (not compounded). The company would pay down on the line of credit balance in increments of $1,000 if it has excess funds at the end of the quarter. The company would also pay the accumulated interest at the end of the quarter on the funds bor- rowed during the quarter. k. The company’s income tax rate is projected to be 30% of operating income less inter- est expense. The company pays $10,000 cash at the end of February in estimated taxes. PROBLEMS Group A P9-57A Comprehensive budgeting problem (Learning Objectives 2

Question 1 20 marks You are 28 years old today and decide to start saving for retirement. Your goal is to be able to withdraw $50,000 per year from your account starting one year after you retire at age 65 and ending on your 95th birthday. You plan to deposit the same amount at the end of each year starting one year from now (your 29th birthday) and ending on the day you retire (your 65th birthday). The money will be deposited in an account paying 7%p.a compounded annually. a. What amount do you need to have in your account on the day you retire? (6 marks) b. What constant annual amount do you need to deposit in your account to fund your retirement goal? (6 marks) c. Now assume that you have already saved $30,000. If there is no change to your savings goal, how much does this change your required annual deposit? (8 marks)

Question 10 10 pts Consider a 27,000 SF shopping center where all tenants pay $20 per square foot, triple-net. Reimbursable operating expenses are $90,000 and non-reimbursable operating expenses are only a management fee that is 3.0% of PGI. Based on these assumptions, how much would the investor pay (net) for operating expenses? $18,900 $15,750 13.500 $9,450 $22,050 Submit w data to save. Last checked at 4:03am

Question 7 10pts A national retailer uses 27,500 SF of “big box” store space and develops these properties for an average cost of $4.5 million. The space leases for $22 per foot (absolute net) with $5 per foot in operating expenses. If the company does a sale-leaseback, what is the approximate price (rounde to thousands) they can expect to get if the property is sold at a 6.25 cap rate? O $11,880,000 O $5,520,000 O $7,920,000 $6,828,000 $9,680,000

Question 2 (Structured mandate): Consider an Insurance firm that needs to make 2 liability payments over the next 7 years: the first liability payment of $2m is due at the end of 3 years and the second iability payment of $5m is due at the end of 7 years. The firm will use the following three bonds to classically immunise the liability payments. Details of the bonds are as follows (assume all bonds pay coupon interest on annual basis, and the YTM for all bonds and liabilities are 8%) Bond Maturity Coupon Interest 5% 1 years A 10% 3 years B 0% 10 years C a) Calculate the present value of the liability stream. b) Calculate the Macaulay’s Duration of the liability stream. c) Calculate the Macaulay’s Duration for each bond. Calculate the investment (proportion only) d) liability stream. e) in Bond A and C only to classically immunise the Suppose that the liability stream needs to be immunised with all three bonds, and the investment in Bond B is fixed at 30%, what is the investment (proportion only) in Bond A and C

The post Question: Question 10 10 Pts Consider A 27,000 SF Shopping Center Where All Tenants Pay $20 Per Square Foot, Triple-net Reimbursable Operating Expenses Are $90,000 And Non-reimbursable Operating Expenses Are Only A Management Fee That Is 3.0% Of PGI. Based On These Assumptions, How Much Would The Investor Pay (net) For Operating Expenses? $18,900 O $15,750 13,500 … appeared first on uniessay writers.

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November 3, 2019