An appraiser estimates that a property will produce NOI of $25,000 in perpetuity, yo is 11...
An appraiser estimates that a property will produce NOI of $25,000 in perpetuity, yo is 11 percent, and the constant annual growth rate in NOI is 2.0 percent. What is the estimated property Value?
Homework Answers
Property value is equal to the present value of perpetuity
=NOI next year/(Required return- Growth rate)
= 25,000/(11%-2%)
= $277,777.78
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