Given the distribution inputs you defined, calculate the value of…
Question Given the distribution inputs you defined, calculate the value of… Given the distribution inputs you defined, calculate the value of your REIT per share and explain your approach. Then, using the REIT’s value as an entry point for potential investors, answer the following questions: A. What is the probability that investors will earn a rate of return that is at least as high as their required rate of return? B. What is the probability that investors will earn a rate of return of at least 8% per year? C. What is the probability that investors will recognize an investment loss greater than 2% per year? Inputs: Outputs: Current share price$ 114.97 NOI$ 7,117,048,000 YearRevenue$ 16,689,976,000K Current “Debt free” private market value$ 189,947,564,000K 012345Expenses$ 9,685,424,000K Current private market value of equity$ 181,233,388,000K NOI $ 7,294,974,200$ 7,477,348,555$ 7,664,282,269$ 7,855,889,326$ 8,052,286,559Depreciation$ 74,871,000K Current private market value per share$ 257.31 Interest $ (198,268,000)$ (198,268,000)$ (198,268,000)$ (198,268,000)$ (198,268,000)Interest$ 37,625,000K “Debt free” value @ Req. return$ 169,683,746,778K Investment/Disposition$ (80,977,943,817) $ 163,930,907,454Current Market CAP4.25% Value per share @ Req. return$ 228.54 CF$ (80,977,943,817)$ 7,096,706,200$ 7,279,080,555$ 7,466,014,269$ 7,657,621,326$ 171,784,926,013Req. unlevered return7.00% Terminal CAP5.00% IRR22.29% Req. levered return9.00% CAP wrt current value of debt and equity8.88% NOI growth rate2.50% Expected return on unlevered basis11.38% Risk premium4.00% Expected return on equity12.36% Total debt$ 8,714,176,000K market CAP=NOI/COST Shares outstanding704,339,774K Projected 10-year treasury3.75% Quality adjustment-0.25% Value of other assets$ 7,573,209,000K Borrowing cost2.28% Business Finance REE 6305 Share QuestionEmailCopy link Comments (0)
