Using the Gordon Growth model calculate the value of the equity of an asset having the following characteristics

Net cash ow to equity (year zero) = $450,000 Market value of debt = $1,000,000 Cost of equity = 24% Cost of debt = 9%

WACC = 16.7% Expected long-term stabilized revenue growth rate = 7% Expected long-term stabilized equity cash ow growth rate = 4% Expected long-term stabilized units sold growth = 9% Expected long-term stabilized TEV cash ow growth rate = 5%

A. $4,038,462 B. $3,340,000 C. $2,340,000 D. $3,832,353 E. $3,685,039