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Question
Problem
East REIT
Income Statement
(for period ending December 31, 2010, in millions)
| Revenues | $200 |
| Expenses | 130 |
| General and Administrative | 5 |
Balance Sheet
(as of December 31, 2010, in millions)
| Assets | Liabilities | ||
| Investment in Real Estate (Net) | $1,000 | Long Term Debt | $400 |
| Equity | |||
| Common Shares | $600 | ||
| Assets | $1,000 | Liabilities and Net Worth | $1,000 |
The debt is interest only with a 5% coupon rate. There are ten million shares outstanding. The shares trade at $80 per share.
Calculate debt to market capitalization
Answer
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