What does it tell an investor about the market as a whole


a) What is the Net Income Multiplier for in each of the markets below? Show your work and round to the nearest $0.01.

Market A:    5.25% Capitalization Rate

Market B:    8.00% Capitalization Rate

Market C: 13.00% Capitalization Rate

b) Briefly explain the significance of the Net Income Multiplier. What does it tell an investor about the market as a whole? What can it tell an investor about a specific investment opportunity?

c) All other things being equal, as the market capitalization rate increases what happens to the value of an income producing property? Briefly explain your reasoning.

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Financial Management: What does it tell an investor about the market as a whole
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