CAPITALIZATION RATE Definition

Bookmark and Share

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

INDIRECT SHAREHOLDING is when one entity directly holds shares of another entity that owns shares of a third but different entity, for example, Shareholder A would have an indirect shareholding of Company C if Shareholder A directly owns shares of Company B while Company B owns shares of Company C.

BLUE CHIP is a stock considered to be of lowest risk with regard to dividend income and capital value.

Suggest a Term

Enter Search Term

Enter a term, then click the entry you would like to view.