capitalization rate
Definition 1
General: Discount (or interest) rate used to determine the present value of a series of future earnings from an investment.
Definition 2
Business valuation: Reciprocal of the desired rate of return multiplied by the normalized earnings of a business to arrive at its purchase price.
Definition 3
Real estate: Ratio of rental income from a property to its market value, expressed as a percentage. This rate is used in comparing rate of return from a property with the rate of return from alternative investments.
capitalization rate is in the Accounting & Auditing, Investing and Real Estate & Buildings subjects.
capitalization rate appears in the definitions of the following terms: capitalization of earnings method, discounted cash flow method and discounted future earnings method
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