What is the ffo and value per share based on an ffo multiple

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Atlantis REIT expects an income of $8.00 per share. This includes a deduction of $2.00 per share for depreciation. Atlantis did not have any gains from the sale of real estate. Its properties are mainly apartments, and you believe that apartments are currently selling on average at about an 8 percent cap rate. Atlantis has 1 million shares outstanding and its balance sheet shows liabilities of $40 million.

Comparable REITs have FFO multiples of about 10. Atlantis is expected to pay a dividend during the next fiscal year of $6.00 per share and to increase those dividends at about 2 percent per year in the future. Investors in REITs like Atlantis usually expect a return of about 12 percent.

a. What is the FFO and value per share based on an FFO multiple?

b. What value per share is indicated using a dividend discount model?

c. What is the value per share implied by the net asset value of the properties?

Reference no: EM131326565

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