Property And Equity

Question 1

Prime property

Answer 1

1. Location
2. Age and condition
3. Comparability
4. Lease structure
5. Tenants
6. Size

**obsolescence
**owner changing investmeng

Question 2

Propert running yield

Answer 2

Rental income (net)/cost of purchase(gross)

Question 3

Considerations when buying property

Answer 3

1. Can you afford it
2. Do you need a loan
3. Will you be able to pay back loan
4. Do you want a fixer up or complete
5. Use of property
6. If rental self mngmnt/co
7. If rental - void seasons
8. Long term plans
   9.retrictions in deeds of property
9. Supply and demand

Question 4

Investment risks and characteristics of property

Answer 4

1. Void
2. Default
3. Obsolescence
4. Maintenance refurbishment
5. Political risk
6. Long term real return
7. Stepped income stream
8. Varying running yield
9. Volatility
   10.high dealing costs
10. Investment character changed by owner
    12 unmarketable
    13 large unit
11. Indivisible
12. Uniqueness
13. Subjective valn

Question 5

Investment and risk characteristics of equities

Answer 5

1. Depends on profitability of company
2. Long term.real yield
3. Higher expected return
4. Dividends and pricing can be volatile
5. Can be held to perpetuity
6. Marketability
7. Quoted vs unquoted

Question 6

Why use industry groupings to categorise shares

Answer 6

1. Practical for analyst to specialise I 1 area
2. Share prices for companies in same sector are correlated
3. Factors affecting 1 company in sector like to affect all
4. Useful Information for 1 company will be useful for all
   5..data can be retrieved from common source in same format
5. Can’t expect to be an expert in all areas
6. Structures decision making process
7. Portfolio classification and management

Question 7

Equity payout ratio

Answer 7

Dividend per share/earnings per share

Question 8

Why buying back shares

Answer 8

Cite
Capital structure change
Improve earnings
Tax advantages for investors
Excess cash