(Answered) Question middle point industrial property trust reports the

Finance

Question: Middle point Industrial Property Trust reports the following financial information, on a per share basis:

GAAP Net Income [Earnings per Share (EPS)] = $4.00

Depreciation & Amortization (GAAP) = $3.00

Dividend Paid = $4.75

Debt = $50, with an average interest rate = 7% Estimated share price premium to net asset value = 10%, based on an estimated private property market cap rate of 8% (weighted average firm level cap rate).

(a) Determine the minimum dividend the firm must pay to shareholders to be a REIT.

(b) Explain how the REIT can pay a dividend in excess of earnings per share. Calculate funds from operation (FFO) as part of your answer.

(d) Determine the current public market price of a share of Middle point stock.

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