A rental property is providing 13% rate of return. Next year's rent is expected to be $1.0 million and is expected to grow at 3% per year forever. What is the current value of the property?
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A rental property is providing 13% rate of return. Next... View the full answer
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1/(0.13+0.03)=$6.25... View the full answer
- correction: 1/(0.13-0.03)=$10million
- Nickson072
- Jul 20, 2016 at 11:39am
Using DDM, value of property =... View the full answer
It's geometric gradient where g is growth, and i is rate of return, A1 is the first payment. When the time... View the full answer
Here is the answer... View the full answer