capitalization rate investment & finance definition
The rate used to convert an income stream into a present value lump sum. For example, a capitalization rate of 10% and an income stream of $2,000 annually provide a present value of $2,000/0.
Capitalization Rate Definition
The accepted capitalization rate definition is a ratio between the annual net operating income produced by an asset and either the total cost of its initial acquisition for new properties or its current value ...
Capitalization rate (or "cap rate") is the ratio between the net operating income produced by an asset and its capital cost (the original price paid to buy the asset) or alternatively its current market value.
Capitalization rate
The ratio of net rentals from an income property to the market value of the property, expressed as a percentage.
Capitalization Rate
Quick Definition
Measures the rate of return of company stock.
Capitalization rate
Definition:
The rate of Interest used to calculate the Present value of a number of Future payments. ...
Capitalization Rate
A discount rate used to find the present value of a series of future cash receipts. Sometimes called discount rate.
Cash Asset Ratio or Cash Ratio ...
Capitalization Rate - Any divisor that is used to convert income into value. This is generally expressed as a percentage.
Discount Rate - The rate of return that is used to convert any future monetary gain into present value.
Also known as a capitalization rate, the cap rate is a discount rating that is used to determine the current or present value of the accumulated assets that will create future earnings.
Estimating Market Capitalization Rates
If we go back to our simplified stock price formula, we can use that same calculation to develop an estimate of the discount rate (or market capitalization rate). Rearranging this formula we have: ...
capitalization rate A rate of interest or discount rate used to convert a series of future earnings... capitalization ratios The distribution of a company's assets between debt, preferred stock, common...
7% capitalization rate compounded with the 5-year average EPS increase rate of 20% and with each period discounted with the estimated 10-year treasury yield of 5%) far exceeds the current selling price of $65.
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Related terms: market capitalization definition, market capitalization rate, total market capitalization, stock market capitalization, market cap definition, market cap rate, stock market cap ...
r = Cost of Capital or the capitalization rate of the company
E = Earning on equity
g = The growth rate of the company.
Rate Cap: Refers to capitalization rate, when used in reference to stocks. Rate caps are determined by multiplying the total number of a Corporation's outstanding shares by the price of the stock.
is a ratio is calculated by taking the net operating income produced by combining all assets, and dividing it by its capital costs, which is the original price paid to purchase the assets also known as the current market value. Capitalization rates ...
 See also: Capitalization, Capital, Investment, Rate, Share
  
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