Capitalisation Rate means…
In valuing businesses the future maintainable profit is expressed at a Capitalisation Rate. The Capitalisation Rate is the rate of return that a prudent arms-length interested, but not anxious investor, would require from an investment in this type of business after the allowance for reasonable management salaries.
WHAT’S IT MEAN? Quickies
This post is part of the “What’s it Mean?” series of short and sweet responses.
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Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
Christie has written 799 awesome articles for us at Alan Lewis Accountants – BLOG
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