Given the following information, calculate the price-FFO multiple for the following REIT. Net income: $1,200,000; Gain/losses from infrequent and unusual events: $0, Amortization of tenant improvements: $120,000; Amortization of leasing expenses: $75,000; Depreciation (real property): $2,675,000; Stock Price: $40; Market Capitalization: $40,000,000

Question

Quizplus · Accepted Answer

The price-FFO multiple is calculated by dividing the market capitalization by the funds from operations (FFO). FFO is calculated as net income plus depreciation and amortization. Here, FFO = $1,200,000 + $2,675,000 + $120,000 + $75,000 = $4,070,000. The price-FFO multiple = $40,000,000 / $4,070,000 = 9.83.

Given the Following Information, Calculate the Price-FFO Multiple for the Following