Question: Problem 12-33 CAPM and Valuation (LO3) You are considering the purchase of real estate that will provide perpetual income that should average $60,000 per year.

Problem 12-33 CAPM and Valuation (LO3)

You are considering the purchase of real estate that will provide perpetual income that should average $60,000 per year. How much will you pay for the property if you believe its market risk is the same as the market portfolios? The T-bill rate is 4%, and the expected market return is 12.5%.

Property value

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