Question: Please do not use Excel. Please show your work and make sure to label for my understanding. Thanks! A REIT has an NOI of $15

Please do not use Excel. Please show your work and make sure to label for my understanding. Thanks!

A REIT has an NOI of $15 as share and currently pays a dividend of $10 a share. The dividend is projected to increase by 4 percent by next year and continue to increase by 4 percent per year thereafter. Assuming that the blended cap rate is 9.75 percent and the required rate of return is 10.5 percent.

a) What value would the Gordon Dividend Discount Model provide?

b) What would the net asset value (NAV) of the REIT be?

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