direct capitalization Definition | Business Dictionaries from AllBusiness.com
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Business Definition for: direct capitalization
direct capitalization

dividing the Net Operating Income by an overall capitalization rate to estimate value. Contrast with yield capitalization .

Example: Table 17.

TABLE 17
DIRECT CAPITALIZATION
Gross income $100,000
Operating expenses - 40,000
Net operating income
$ 60,000
Capitalization rate ÷ 0.12
Value estimate $500,000
See also capitalized value
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