Assume you will get 20 rental payments paid over 20 years at the beginning of each year. Initially, the rent equals R=$12; but it will grow at a rate of 1% per year. The NPV of this income stream equals $170.20. What is your discount rate? Provide your answer as percentage with two decimals, e.g., 1.23% (or 0.0123)
Assume you will get 20 rental payments paid over 20 years at the beginning of each year. Initially, the rent equals R=$12; but it will grow at a rate of 1% per year. The NPV of this income stream equals $170.20. What is your discount rate? Provide your answer as percentage with two decimals, e.g., 1.23% (or 0.0123)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Assume you will get 20 rental payments paid
over 20 years at the beginning of each year.
Initially, the rent equals R=$12; but it will grow
at a rate of 1% per year. The NPV of this
income stream equals $170.20. What is your
discount rate? Provide your answer as
percentage with two decimals, e.g., 1.23% (or
0.0123)
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