Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Why are discounted cash flow (DCF) rates typically higher than capitalization rates? A) Discount rates use a reversion of the capitalization rate to project stabilized

Why are discounted cash flow (DCF) rates typically higher than capitalization rates?

A) Discount rates use a reversion of the capitalization rate to project stabilized net operating income (NOI).

B) Discount rates consider that the project is stabilized and has a perpetual income stream.

C) Discount rates include expected increases in future prices and inflation.

D) Discount rates do not take into account the time value of money.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Asset Allocation Strategies For Mutual Funds Evaluating Performance Risk And Return

Authors: Giuseppe Galloppo

1st Edition

3030761274,3030761282

More Books

Students also viewed these Finance questions