Where the overall cap rate meets the discount rate
Sevelka, T.
Where the overall cap rate meets the discount rate - 2004 - Appraisal Journal 72(2) Spring 2004, 135-146(12) .
This article explores the relationship between the overall capitalization rate (R) and the discount rate (Y). It illustrates how value equivalency can be achieved between direct capitalization and yield capitalization (ie, discounted cash flow) when the percentage change in annual net operating income is made to correspond to the spread between a uniquely paired R and Y. A number of investor survey simulations are performed as further support for the premise that each uniquely paired R and Y is linked by the corresponding income-growth factor and illustrates that investor surveys can be reliably used as a source for uniquely paired Rs and Ys in the application of the income capitalization approach. [Taken from journal abstract].
DISCOUNTED CASH FLOW
DISCOUNTED CASH FLOW ANALYSIS
CAPITALIZATION
RENTAL INCOME
INFLATION
VALUATION MODELS
INVESTOR SURVEYS
REAL INCOME GROWTH
Where the overall cap rate meets the discount rate - 2004 - Appraisal Journal 72(2) Spring 2004, 135-146(12) .
This article explores the relationship between the overall capitalization rate (R) and the discount rate (Y). It illustrates how value equivalency can be achieved between direct capitalization and yield capitalization (ie, discounted cash flow) when the percentage change in annual net operating income is made to correspond to the spread between a uniquely paired R and Y. A number of investor survey simulations are performed as further support for the premise that each uniquely paired R and Y is linked by the corresponding income-growth factor and illustrates that investor surveys can be reliably used as a source for uniquely paired Rs and Ys in the application of the income capitalization approach. [Taken from journal abstract].
DISCOUNTED CASH FLOW
DISCOUNTED CASH FLOW ANALYSIS
CAPITALIZATION
RENTAL INCOME
INFLATION
VALUATION MODELS
INVESTOR SURVEYS
REAL INCOME GROWTH