Land Can Be Viewed as Having an "Option" to Develop

question 2

True/False

Land can be viewed as having an "option" to develop the land.

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Definitions:

Market Capitalization Rate

The expected rate of return on a portfolio consisting of all publicly traded securities, weighted by market capitalization.

PVGO

Present Value of Growth Opportunities; the portion of a company's stock price that is attributed to its expected earnings growth.

Free Cash Flow

The amount of cash generated by a company after accounting for capital expenditures, necessary to maintain or expand the asset base.

WACC

The weighted average cost of capital, a measure of a firm's cost of capital in which each category of capital is proportionately weighted.