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2. INFLATION AND ASSET RETURNS I: (5 points) Suppose we operate a real estate development company which constructs 8 income producing properties per year. Current

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2. INFLATION AND ASSET RETURNS I: (5 points) Suppose we operate a real estate development company which constructs 8 income producing properties per year. Current labor and raw material costs total $30 million per unit and are expected to increase in direct relation to the overall rate of inflation. Sales revenues (currently $36 million per unit) are not currently subject to any long-term contracts, and thus, will also be expected to instantaneously adjust to any changes in the overall price level. If investors require a real return of 3%, inflation is expected to be 2% per year in perpetuity, and the firm currently has 20,000,000 shares of common stock outstanding, what should be the current market price of each share of stock

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