Question
What is the implied risk premium for the following property? Show your work. Cap rate = 7.7% Risk free rate = 3.7% CPI inflation rate
What is the implied risk premium for the following property? Show your work.
Cap rate = 7.7%
Risk free rate = 3.7%
CPI inflation rate = 2%
Deterioration rate due to aging = 0.6%
City-specific growth premium = 1.6%
Annual population growth rate = 3.4%
Mortgage interest rate = 4.8%
Property tax rate = 1.5% of the property value
Annual maintenance costs = 2% of the property value
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Personal Finance
Authors: Jack Kapoor, Les Dlabay, Robert J. Hughes, Arshad Ahmad, Jordan Fortino
6th Canadian edition
1259453146, 978-1259453144
