Question
You are preparing an A-REIT valuation report for one diversified A-REIT, Property Trust. The company has 550 million shares on-issue, with the companys shares are
You are preparing an A-REIT valuation report for one diversified A-REIT, Property Trust. The company has 550 million shares on-issue, with the companys shares are trading at $3.60 per share. The company distributes 90% of its income to unitholders in 2018.
| 2018 Profit & Loss Statement | 2018 Balance Sheet | |||
|---|---|---|---|---|
| Net income | $152.0 mil | Cash | $6.5 mil | |
| Total expenses | $38.0 mil | Property | $1,108.0 mil | |
| Undistributed income b/f | $0.5 mil | Total liabilities | $183.0 mil |
5-year Distribution per unit forecast (cents per share)
| Year | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 |
|---|---|---|---|---|---|---|
| DPU | 18.7 | 21.0 | 21.8 | 23.7 | 25.4 | 26.9 |
Using the information given, assess the property Trust using:
Yield-based valuation
NTA-based valuation
Dividend discount model, using 6.7% discount rate and 7.8% terminal capitalization rate
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An Introduction To Trading In The Financial Markets Market Basics
Authors: R. Tee Williams
1st Edition
0123748380, 9780123748386
