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The income approach is a real estate appraisal valuation method. It is one of three major groups of methodologies, called valuation approaches , used by appraisers. It is particularly common in commercial real estate appraisal and in business appraisal.
In several contexts, DCF valuation is referred to as the "income approach". Discounted cash flow valuation was used in industry as early as the 1700s or 1800s; it was explicated by John Burr Williams in his The Theory of Investment Value in 1938; it was widely discussed in financial economics in the 1960s; and became widely used in U.S. courts ...
The result of a value calculation under the income approach is generally the fair market value of a controlling, marketable interest in the subject company, since the entire benefit stream of the subject company is most often valued, and the capitalization and discount rates are derived from statistics concerning public companies.
The income capitalization Approach (often referred to simply as the "income approach") is used to value commercial and investment properties. Because it is intended to directly reflect or model the expectations and behaviors of typical market participants, this approach is generally considered the most applicable valuation technique for income ...
Small-cap: Companies with a market capitalization between $300 million and $3 billion In the example above, Company A with a market cap of $10 billion could be considered a mid-cap.
Capitalization rate (or "cap rate") is a real estate valuation measure used to compare different real estate investments. Although there are many variations, the cap rate is generally calculated as the ratio between the annual rental income produced by a real estate asset to its current market value. Most variations depend on the definition of ...
A capitalization table or cap table is a table providing an analysis of a company's percentages of ownership, equity dilution, and value of equity in each round of investment by founders, investors, and other owners.
A related approach, known as a discounted cash flow analysis, can be used to calculate the intrinsic value of a stock including both expected future dividends and the expected sale price at the end of the holding period. If the intrinsic value exceeds the stock’s current market price, the stock is an attractive investment.