Answer:
The practice of compensating asset managers based on the value of net assets managed creates an agency problem because managers have the incentive to acquire and hold assets--rather than maximizing the investor's rate of return. Establishing management compensation based on maximizing the investor's rate of return better aligns the interests of the manager and investor/principal.
Answer:
The correct answer is option (c) The firm benefits from property appreciation that occurs after the sale-leaseback.
The sale-leaseback transaction increases a company's financial flexibility by off-loading real estate at attractive long-term rates, while maintaining the availability of bank financing for a future date. By being both the lessee and the seller of the property, a corporation has greater bargaining power to ensure it maintains uninterrupted control of the facilities, including operations, maintenance and alterations; it negotiates the rights to assign and sublet the facilities, as well as enjoys lengthy initial and renewal terms.
Answer:
The correct answer is option (b) CPM.
To earn the designation, property managers must have a minimum of five years of full-time decision-making activity in real estate management, take numerous educational courses, and pass a rigorous exam. In addition, CPMs must agree to continuous education to keep their certifications current and abide by the highest standards of professional ethics.