Capitalisation factor: Difference between revisions
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* [[Perpetuity]] | * [[Perpetuity]] | ||
* [[Perpetuity factor]] | * [[Perpetuity factor]] | ||
* [[Valuation]] | |||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
Latest revision as of 18:11, 26 June 2024
Financial maths - valuation - perpetuities - real estate.
A capitalisation factor is a quick and simple valuation method for income producing assets.
The capitalisation factor is the ratio between the annual net income and the estimated valuation of the income producing asset.
It uses the same logic as a fixed perpetuity formula (1/r).
Applications include real estate rental properties.
