Meaning of “capitalization rate” in the English Dictionary

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"capitalization rate" in Business English

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capitalization ratenoun [ C ]

UK also capitalisation rate uk us also cap rate

ACCOUNTING, FINANCE the rate of interest used to calculate the present value of an investment or property that will provide an income in the future:

Investors use the cap rate to estimate the purchase price for different types of income-producing properties.

(Definition of “capitalization rate” from the Cambridge Business English Dictionary © Cambridge University Press)