You have been presented with the following set of financial statements for National Property Trust, a REIT that is about to make an initial stock offering to the public. This REIT specializes in the acquisition and management of warehouses. Your firm, Blue Street Advisors, is an investment management company that is considering the purchase of National Property Trust shares. You have been asked to prepare a financial analysis of the REIT. National Property Trust Panel A. Operating Statement Summary Net revenue $100,000,000 Less: Operating expenses 40,000,000 Depreciation and amortization 22,000,000 General and administrative expenses 6,000,000 Management expense 3,000,000 Income from operations 29,000,000 Less: Interest expense (at 8% interest only) 6,400,000 $22,600,000 Panel B. Balance Sheet Summary Assets Cash $51,500,000 Rents receivable 2,500,000 Properties @ cost 700,000,000 Less: Accumulated depreciation 450,000,000 Properties - net 250,000,000 Total net assets $304,000,000 Liabilities Short term $12,000,000 Mortgage debt (at 8% interest only) 80,000,000 Total 92,000,000 Shareholder equity (10,000,000 shares outstanding) 212,000,000 Total liabilities and equity $304,000,000

Develop a set of financial ratios that will provide Blue Street Advisors with useful information in the evaluation and comparison of National Property Trust with other REITs. EPS 2.26 NOI 5.10 FFO 4.46 Dividend per share (90% x EPS) 2.03 ROC -0.23 Cash Retention per share 2.43 Net assets per share 30.40 Equity or Book Value per share 21.20 ROA 16.8 % ROE 21 %

Your research also indicates that the shares of comparable REITs specializing in warehouse acquisitions in the same regions are selling at dividend yields in the range of 8 percent. Price multiples for these REITs are about 12 current FFO.

1.) What dividend would National have to pay to be in line with comparable REITs?