General equivalency between the discount rate and the going-in&going-out capitalization rates

Gaetano Lisi

Economics and Business Letters, 2016, vol. 5, issue 2, 58-64

Abstract: Basically, this note extends the very useful works by Etter (1994) and Sevelka (2004) about the equivalence between discount rate and capitalization rate. The extension concerns two main points. First, it frames this relation within a clear and simple 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 & going-out capitalization rates.

Date: 2016
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