Assessment Journal
Keywords
Capitalization
Abstract
Future investment by a firm can be classified into replacement assets and growth assets. Yield capitalization assumes the return on growth assets is equal to the cost of capital and the return on replacement assets is equal to the return on the assets in place. The latter return need not be equal to the cost of capital. In this article, the valuation implications arising from the violation of these assumptions are analyzed.
Recommended Citation
Simonds, Richard R.
(1999)
"Clarification of the ROE equals Ke assumption in yield capitalization,"
Assessment Journal: Vol. 6:
No.
6, Article 3.
Available at:
https://researchexchange.iaao.org/assessment_journal/vol6/iss6/3
First Page
53
Last Page
55
COinS
