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Capitalization rate (or "cap rate") is a real estate valuation measure used to compare different real estate investments. It is the ratio between the annual rental income and the current market value of a property, and it can be calculated using different formulas and assumptions.
Learn about interest rate caps and floors, which are derivatives that pay when the interest rate exceeds or falls below a certain level. Find out how they work, how they are valued, and how they can be used to hedge against interest rate fluctuations.
Business valuation is a process to estimate the economic value of an owner's interest in a business. Learn about the standard and premise of value, the elements of a business valuation report, and the specialized credentials of business valuators.
Learn how to calculate the expected return and risk of an asset using the CAPM formula, which takes into account the market risk and the risk-free rate. The CAPM is a popular model in finance and portfolio theory, but it has some limitations and alternatives.
As the Federal Reserve signals interest rate cuts in 2024, investors may want to see how cap rates across various markets respond. Lower borrowing costs could compress cap rates in some areas ...
Learn how capital gains are taxed in the US based on the investor's tax bracket, the holding period, and the type of asset. Find the current tax rates, exemptions, and exceptions for 2022 and previous years.
In an interest rate collar, the investor seeks to limit exposure to changing interest rates and at the same time lower its net premium obligations. Hence, the investor goes long on the cap (floor) that will save it money for a strike of X +(-) S1 but at the same time shorts a floor (cap) for a strike of X +(-) S2 so that the premium of one at ...
Learn about the income approach, a real estate appraisal valuation method that uses net operating income, capitalization rate, and discounted cash flow. Compare different methods and formulas, and see examples and references.