Where the overall cap rate meets the discount rate
Series: Appraisal Journal ; 72(2) Spring 2004, 135-146(12)Publication details: 2004Subject(s): Summary: 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].| Item type | Current library | Call number | Copy number | Status | Barcode | |
|---|---|---|---|---|---|---|
| Journal article | London Journal article | ABS67973 (Browse shelf(Opens below)) | 1 | Available | 126684-1001 |
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].