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Given the following information, what is the equity cost of capital (re) of Simon Property REIT (SPR), as computed by the CAPM model? Pr =
Given the following information, what is the equity cost of capital (re) of Simon Property REIT (SPR), as computed by the CAPM model? Pr = 4.0% I'm = 5.0% B = -0.150 Compute your answer to three decimal places. Do not represent your answer as a percentage. You (as a private equity investor) note that GoodCo REIT is a decent-looking, debt-free company, that is not managed very well. You are therefore considering this project: - Buy 100% of GoodCo today for $1,000K - Receive estimated GoodCo dividends of $50K for the next two years (at EOY 1 and EOY 2). - Sell the firm at EOY 2, just after you receive the EOY 2 dividend, You estimate that, do to awesome management improvements, them market price of the firm will be $1,200K when you sell.. - You believe, based on your CAPM analysis, that re for the firm is 12.00% What is the NPV of this project? As always, use the given units. Represent your answer to two decimal places
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