Question
An office building is currently for sale, and you are thinking of purchasing it. From your extensive market research and knowledge, you know the net
An office building is currently for sale, and you are thinking of purchasing it. From your extensive market research and knowledge, you know the net operating income for this year is $250,000. You expect the net operating income will grow by 5% in the first five years, 3% in the subsequent five years, and 1.5% for every year after. If you are considering a 15- year investment window and desire a 20% rate of return, how much should you pay for the building?
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Fundamentals of Corporate Finance
Authors: Berk, DeMarzo, Harford
2nd edition
132148234, 978-0132148238
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