1. Your property is expected to produce end-of-year cash flows of $10,000 per year for the next 15 years. You expect to sell your property for $500,000 at the end of the 15^th year. The beta of your property is 2. The expected return on the Market is 10% and the appropriate Treasury yield is 4%. What is the fair value of the property?
2. You have borrowed $35,000 at 7% APR be repaid in 3 annual installments. What is amount of each installment? Amortize this loan.
3. What is the book value of a stock? How would you compute it? What is the M/B ratio?