BUSI 422 Read & Interact Brueggeman & Fisher Chapter 15 solutions complete answers

BUSI 422 Read & Interact Brueggeman & Fisher Chapter 15 solutions complete answers

 

A company's stock ______.

 

A sale-leaseback is when a company ______.

 

Mortgage financing may be a ________ corporate debt.

 

Developers and real estate investors are _________ corporate users.

 

True or false: Real estate is listed at market rather than book value on the firm's balance sheet.

 

The cost of owning real estate is ______

 

Companies own assets whose __________.

 

A special purpose building is _________.

 

Owning and managing real estate _______.

 

An example of a special purpose building would be a __________.

 

A REIT is a ________.

 

The expected life of an asset _______.

 

True or false: Having a credit rated tenant will make it easier for a developer to obtain financing.

 

A large institutional real estate investor, such as a REIT, is likely to have ______ over a company using a large portion of their total capital to finance a real estate investment.

 

A investment grade credit rated corporation ____ for unsecured debt than for a mortgage.

 

The reversion value of land and improvements at the end of the lease term is know as:

 

Assuming an investor and a corporation are in the same tax bracket and will finance a property in the same way, the rate of return for the investor will be ______.

 

True or false: One benefit of owning real estate is that a corporation can take the tax benefits of depreciation.

 

real estate is when a firm owns real estate as part of its business operations rather than as an investment

 

When a firm owns real estate as a part of business operations rather than as an investment this is known as:       .

 

Which of the following is a benefit to corporate ownership of real estate? (Select all that apply).

 

When real estate is not a primary part of a corporation’s business activity, the corporation may be better off        the property.

 

A high-tech research and development firm is better off        their space, while a distribution warehouse is better off        their space.

 

True or False: Corporations with a high credit rating are more likely to lease than own real estate.

 

If a corporation will be the dominant tenant in a space, but will not use the full space        the space will be preferable to        the space.

 

Which of the following is a reason owning real estate may affect the value placed on the corporation by investors and lenders. (Select all that apply).

 

When conducting lease vs. own analysis, a corporation should compare        of real estate investing to alternative investment opportunities.

 

A corporation wishing to raise capital without selling real estate could        their real estate with a mortgage.

 

True or false: By deciding to own, rather than lease, a corporation does not bear real estate risk that is completely unrelated to its operating success.

 

A large institutional real estate investor, such as a REIT, is likely to have        over a company using a large portion of their total capital to finance a real estate investment.

 

True or false: A special purpose building is essentially a corporate security.

 

Large disparities in stock price and perceived real estate values can exist because of the following: (Select all that apply).

 

True or false: Due to the Tax Reform Act of 1986 taxes are a much larger component of the lease vs. own decision today.

 

A lease is considered a capital lease if it extends for at least        percent of the asset’s life.

 

True or false: A corporation should always use mortgage debt rather than unsecured corporate debt to finance real estate due to the interest rate advantage.

 

A corporation that owns more real estate than it needs for its operations is using real estate to        its business activities.

 

Corporations that require high levels of maintenance are better off       .

 

True or false: Assuming an investor and a corporation are in the same tax bracket and will finance a property in the same way, the rate of return for the investor will be exactly the same as it is for the corporation.

 

The decision to hold real corporate assets is not affected by:

 

Suppose a corporation has estimated that they will need space for manufacturing a new product for the next 10 years. In this case, it would be better for them to       .

 

A company that wishes to sell its real estate holdings but does not want to relocate operations may benefit from a:

 

The reversion value of land and improvements at the end of the lease term is known as:

 

True or false: If a corporation owns the real estate that they use for business operations it is essentially investing in real estate.

 

When the value of corporate real estate is not fully reflected in stock prices it is known as       .

 

Off-balance-sheet financing requires the use of a(n)         lease.