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An apartment building can be well represented as producing net rent of R10/m2 annually in arrears, with expected annual growth over the long run of

An apartment building can be well represented as producing net rent of R10/m2 annually in

arrears, with expected annual growth over the long run of negative 1% per year (that is, a

decline of 1% per year). Use the constant-growth perpetuity formula to estimate the apartment building's value (per m2) if the required annual expected total return from the investment is

10%.

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