Annual net rental income from this building is $10,000 and is expected to grow at 1.5% annually; Given the current economic conditions, the investor doesn't have many opportunities for other investments and his total required return is 9.5%.

a. What is the implied cap rate for this investor? Explain.

b. What is the price the investor is willing to pay for this building?

c. Suppose that the economic conditions improve, and the expected growth rate for rent becomes 3% and the net rental income becomes $12,000, what would be the value of this apartment building?