Anna Ginzburg, CFA, is using the following information to analyse a potential investment in an industrial building. Estimated 12 months' cash net operating income (NOI) - $40 Funds from operations (FFO) - $30 Cash and equivalents - $30 Accounts receivable - $20 Debt and other liabilities - $250 Non-cash rents - $5 Recurring maintenance-type capital expenditures - $10 Shares outstanding - 10 million shares Expected annual dividend next year (2014) - $3.00 Dividend growth rate in 2015 and 2016 - 4\% Dividend growth rate (from 2017 into perpetuity) - 3\% Assumed cap rate - 8% Office subsector average P/FFO multiple 12x Office subsector average P/AFFO multiple - 20x Ginzburg's cost of equity capital - 11% Risk-free rate - 2% The value of Ginzburg's potential investment using a price-to- FFO approach is closest Select an option $30 $35 $40 $45