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- Title
General equivalency between the discount rate and the going-in and going-out capitalization rates.
- Authors
Lisi, Gaetano
- Abstract
This theoretical paper extends the useful work of Sevelka (2004) concerning the equivalence between discount rate and capitalization rate. The extension concerns two main points. First, it frames this relation within a clear theoretical framework, that starts from the net present value and goes on to the direct capitalization, passing through the yield capitalization. Second, it also provides an equivalence relation between discount rate and going-in and going-out capitalization rates. These equivalence relations turn out to be crucial for real estate appraisals.
- Subjects
DISCOUNT prices; INTEREST rates; ECONOMIC indicators; CONSUMER confidence; FEDERAL Reserve banks; VARIABLE interest rates
- Publication
Economics & Business Letters, 2016, Vol 5, Issue 2, p58
- ISSN
2254-4380
- Publication type
Article
- DOI
10.17811/ebl.5.2.2016.58-64