capitalization rate
noun[C]
(UKalsocapitalisation rate)ukus(alsocap rate)ACCOUNTING,FINANCE
therateofinterestused tocalculatethepresentvalueof aninvestmentorpropertythat willprovideanincomein thefuture:
Investors use thecapratetoestimatethepurchasepricefor differenttypesof income-producingproperties.