CAPITALIZATION RATE Definition

CAPITALIZATION RATE, also known as CAP RATE, is the rate of return a property will produce on the owners investment. It is stated as a rate of interest or discount rate used to convert a series of future payments into a single present value. In real estate, the rate includes annual capital recovery in addition to interest.

Learn new Accounting Terms

BACK-TO-BACK TRADING allows securities dealers to trade and settle the same securities several times during the same settlement day without loss of value days.

CASH DIVIDEND is the payment of earnings to shareholders.

Suggest a Term