FIN 414 SEU Real estate Finance Questions
Description
College of Administrative and Financial Sciences
Assignment 3
Real estate Finance (FIN414)
Deadline: (7/05/2022 @ 23:59 PM)
Course Name: Real estate Finance
Course Code: FIN414
Student’s Name:
Semester: 2nd
CRN:
Student’s ID Number:
Academic Year: 1443/1444 H, 2nd Semester
For Instructor’s Use only:
Instructor’s Name:
Students’ Grade: /10
Level of Marks: High/Middle/Low
Instructions – PLEASE READ THEM CAREFULLY
•
This assignment is an individual assignment.
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The Assignment must be submitted only in WORD format via the allocated
folder on Blackboard.
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Assignments submitted through email will not be accepted.
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Students are advised to make their work clear and well presented. This also
includes filling in your information on the cover page.
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Students must mention the question number clearly in their answers.
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Late submitted assignments will NOT be entertained.
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Avoid plagiarism, the work should be in your own words, copying from
students or other resources without proper referencing will result in ZERO
marks. No exceptions.
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All answers must be typed using Times New Roman (size 12, double-spaced)
font. No pictures containing text will be accepted and will be considered
plagiarism).
Submissions without this cover page will NOT be accepted.
Assignment Questions
(Reference Chapters 11,12, & 13)
Question 1. If the value of the property is USD 1 Million, Value allocated to the building is
90%, 10% to land, Loan- to-value is 80%, Interest Rate is 8%, and loan duration is 30 years,
Calculate the following
A. Debt Service, Equity Dividend, Equity Dividend Rate, and Debt Coverage Ratio
[2Marks]
B. Explain the motivating factors of investing in the Income properties. [2Marks]
Question 2. What is financial Leverage? Distinguish between Positive & Negative financial
leverage. Also explain the concept of Alternative Financing Structures.
[3Marks]
Question 3. What are the different types of risks involved in real estate industry? Explain
any three types of the risks in detail.
[3Marks]
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