CS Professional · Strategic Management and Corporate Finance · Real Estate Investment Trusts
A REIT earns Rs 50 crore of net distributable cash flows (NDCF) at the REIT level in a year. SEBI rules require at least 90% of NDCF to be distributed to unitholders. What is the minimum amount the REIT must distribute?
The minimum distribution is Rs 45 crore, being 90% of Rs 50 crore NDCF, as the REIT must distribute at least 90% of its net distributable cash flows. Rs 5 crore is only the maximum retainable portion, and 80% would breach the requirement.
- ARs 40.0 crore
- BRs 45.0 croreCorrect
- CRs 5.0 crore
- DRs 47.5 crore
Explanation
Minimum distribution = 90% x Rs 50 crore = Rs 45 crore. Rs 5 crore is the maximum that can be retained (the 10% balance), not the distribution. Rs 40 crore uses 80%, which is wrong.
Did you get it right without looking?
One question tells you little. A timed set on Real Estate Investment Trusts shows your real accuracy, how long you take and where you lose marks.
More Real Estate Investment Trusts questions
- Konkan Office REIT has assets of Rs 2,000 crore and plans consolidated borrowings and deferred payments of Rs 600 crore. Which statement is …
- Which classification of REITs is based on the nature of their underlying holdings, with equity REITs owning and operating income-producing p…
- Consider these statements about the structure and types of REITs. (I) A REIT registered with SEBI is set up as a trust. (II) REIT units, onc…
- Which of the following best describes a Real Estate Investment Trust (REIT) in the Indian context?
- A REIT is constituted as a trust. Which statement correctly describes the legal form needed for a REIT to be eligible for registration with …
- Under the SEBI REIT Regulations, which statement about the manager of a REIT is correct?