Question
A property's capitalization rate is a measure of the relationship between a property's current income stream and its price or value. Which of the following
A property's capitalization rate is a measure of the relationship between a property's current income stream and its price or value. Which of the following statements regarding real estate capitalization rates is FALSE?
A. | It is the projected rate at which real property prices will appreciate in the future | |
B. | It is analogous to the dividend yield on a common stock since it only accounts for future cash flows from operations | |
C. | It is a measure of the income component of a property's return since it only accounts for future cash flows from operations | |
D. | It can be estimated by direct extraction or market surveys | |
E. | It is a valuation multiple obtained from sales of comparable properties |
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