Determining the maximum price

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You are considering buying a building. The typical beta of real estate companies is 1.2. The current risk-free rate is 6%. The expected market risk premium is 8.2%. You expect that the profit of the building will be $500,000. You expect the profit to grow indefinitely at 4% per annum. What is the maximum price you are willing to pay for the building? Round your answer to the nearest whole dollar.

Reference no: EM133069987

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