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Briefly set out the Gordon growth model formula for an asset's intrinsic value (P*) Carefully explain how each of the variables in the Gordon growth
Briefly set out the Gordon growth model formula for an asset's "intrinsic" value (P*) Carefully explain how each of the variables in the Gordon growth model influence the value (P*) a) 18] b) Show formally what happens to the intrinsic value (P*) in the following two cases: (i) the rate of return becomes zero and (ii) when an asset ceases to pay dividends. Provide a clear economic explanation for both cases [10] c) How might the Gordon growth model be used to explain changes in frish commercial land prices over the last two decades? 17)
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