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7. You are considering to buy a building. The beta of real-estate companies is 1.2. The annual risk-free rate is 6% and the annual market
7. You are considering to buy a building. The beta of real-estate companies is 1.2. The annual risk-free rate is 6% and the annual market premium is 8.2%. The expected annual profit from the building is $500,000 and it is expected to grow at the rate of 4% per year. What is the maximum price you are willing to pay for the building?
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