Given a text T, and several options, according to the question posed in the text T to choose the most appropriate option from the options as the answer, please directly output the most appropriate option, do not need to output the explanation.

Tim Wang is a financial adviser specializing in commercial real estate investing. He is meeting with Mark Caudill, a new client who is looking to diversify his investment portfolio by adding real estate investments. Caudill has heard about various investment vehicles related to real estate from his friends and is seeking a more in-depth understanding of these investments from Wang.Wang begins the meeting by advising Caudill of the many options that are available when investing in real estate, including the following:Option 1 Direct ownership in real estateOption 2 Publicly traded real estate investment trustsOption 3 Publicly traded real estate operating companiesOption 4 Publicly-traded residential mortgage-backed securitiesWang next asks Caudill about his investment preferences. Caudill responds by telling Wang that he prefers to invest in equity securities that are highly liquid, provide high income, and are not subject to double taxation.Caudill asks Wang how the economic performance of REITs and REOCs is evaluated and how their shares are valued. Wang advises Caudill there are multiple measures of economic performance for REITs and REOCs, including the following:Measure 1 Net operating incomeMeasure 2 Funds from operationsMeasure 3 Adjusted funds from operationsIn response, Caudill asks Wang:“Which of the three measures is the best measure of a REIT’s current economic return to shareholders?”To help Caudill’s understanding of valuation, Wang presents Caudill with data on Baldwin, a health care REIT that primarily invests in independent and assisted senior housing communities in large cities across the United States. Selected financial data on Baldwin for the past two years are provided in Exhibit 1.
| Exhibit l.Baldwin RE IT Summarized Income Statement(USD thousands, except per- |
| Year Ending 3l December |
| 2019 | 2018 |
| Rental income | 339，009 | 296，777 |
| Other property income | 6，112 | 4，033 |
| Total income | 345，121 | 300，810 |
| Rental expenses |
| Property operating expenses | 19，195 | 14，273 |
| Property taxes | 3，610 | 3，327 |
| Total property expenses | 22，805 | 17，600 |
| Net opera tng income | 322，316 | 283，210 |
| Other income(gains on sale of properties) | 2，162 | 1，003 |
| General and administrative expenses | 21，865 | 19，899 |
| Depreciation and amortization | 90，409 | 78，583 |
| Net interest expenses | 70，017 | 56，404 |
| Net income | 142，187 | 129，327 |
| Weighted average shares outstanding | 121，944 | 121，863 |
| Eam ings per share | 1.17 | 1.06 |
| Dividend per share | 0.93 | 0.85 |
| Price/FFO， based upon year-end stock price | 11.5x | 12.7x |


Before the meeting, Wang had put together some valuation assumptions for Baldwin in anticipation of discussing valuation with Caudill. Wang explains the process of valuing a REIT share using discounted cash flow analysis, and he proceeds to estimate the value of Baldwin on a per-share basis using a two-step dividend discount model using the data provided in Exhibit 2.
| Exhibit 2.Baldwin Valuation Projections and Assumptions |
| Current risk-free rate | 4.0% |
| Baldwin beta | 0.90 |
| Market risk premium | 5.0% |
| Appropriate discount rate(CAPM) | 8.5% |
| Expected dividend per share， 1 year from today | $1.00 |
| Expected dividend per share， 2 years from today | $1.06 |
| Long-term growth rate in dividends， starting in year 3 | 5.0% |


 
The Baldwin REIT is least likely to experience long-run negative effects from:
Option A:An economic recession.
Option B:An unfavorable change in population demographics.
Option C:A major reduction in government funding of health care.

Answer: A