Equity Dividend Rate

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chrisglo

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The equity dividend rate is calculate as Cashflow / Equity
However in Schweser Practice Exams 1 Exam 1 Afternoon Session is calculated as NOI / Equity.
Has anyone figured this out?
Thank you
 
Equity div rate is
NOI- debt payment / sale price - mortgage
 
Yes thats what I thought trogulj but in this practice exam they took it as NOI. Have you tried that exam?
 
Chris it was a mistake, check the errata. The correct calculation Involves reducing the numerator by the debt payment.
 
Thank you panos!!! much obligated - these errors get you crazy!
 
On that same question (Exam 1 PM, #93) - Does NOI ever grow? I didn’t get the levered IRR calculation because we’re given a growth rate of 2.5%, so I applied that to the NOI for the ten years, but in the key they don’t use the growth.
 
The growth rate is implicitly embedded in the cap rate. No need to “constant growth” the NOI like in DCF method.
Since after-tax CF is 2,001K, the equity dividend rate should be 20.01%, answer should be A but they not yet post an errata on their website =.= these mistakes drive people nuts!!!
 
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