Problem $12-33$ CAPM and Valuation $($LO$3)$

You are considering the purchase of real estate that will provide perpetual income that should average $$70,000$ per year. How much

will you pay for the property if you believe its market risk is the same as the market portfolio's? The T$-$bill rate is $5\%,$ and the expected

market return is $8\mathrm{.}0\%.$

Property value