The REIT fund has 100,000 shares outstanding and the appropriate cap rate is 11%. Given that NOI is expected to grow at a rate of 1.6% next year, estimate the Net asset value per share for making an investment in REIT. The financial information for making calculation: Last 12 months real estate NOI - $ 584,960; Non-cash rents 9,885; Full year impact of acquisitions 5,279; Cash and cash equivalents 74,388; Land for future development 27,874; Accounts receivable $ 36,912; Total debt $ 1,625,370 and Other liabilities S 342,579
Cost of Debt, Cost of Preferred Stock
This article deals with the estimation of the value of capital and its components. we'll find out how to estimate the value of debt, the value of preferred shares , and therefore the cost of common shares . we will also determine the way to compute the load of every cost of the capital component then they're going to estimate the general cost of capital. The cost of capital refers to the return rate that an organization gives to its investors. If an organization doesn’t provide enough return, economic process will decrease the costs of their stock and bonds to revive the balance. A firm’s long-run and short-run financial decisions are linked to every other by the assistance of the firm’s cost of capital.
Cost of Common Stock
Common stock is a type of security/instrument issued to Equity shareholders of the Company. These are commonly known as equity shares in India. It is also called ‘Common equity
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