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An analyst is interested in determining the value of a real estate investment and has estimated the following data for the property:
---------------------------------------------------------------------------------- Net operating income $50,480 Cost of debt 8.2% Depreciation $3,550 Cost of equity 12.5%
Interest expense $2,720 WACC 9.6%
Tax rate 35% Cap rate 11.0%
---------------------------------------------------------------------------------- Which of the following is closest to the value of the property using the income approach?
A. $403,900
B. $458,900
C. $466,500.
Answer: B
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B. Isp Isp-name
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D. Idp
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