Question: The following problem uses the Net Asset Value approach to value a REIT. Assume a REIT has net debt of $2,000M, and 120M shares outstanding.

The following problem uses the Net Asset Value approach to value a REIT. Assume a REIT has net debt of $2,000M, and 120M shares outstanding. The stock price and NAV/share = to $15.38 and a fair cap rate for the portfolio is 6.50%. What is the implied NOI in $M?

$150.5M

$202.5M

$250.0M

$285.0M

2. The following problem uses the Net Asset Value approach to value a REIT. ABC Realty Trust has an annual NOI of $650M. Net debt equals $5,000M. The company has 300M shares outstanding. If the stock trades at $14.29/share, and the value of NAV/share is equal to the stock price, what is the implied cap rate?

5.68%

7.00%

6.16%

8.01%

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