Question

How are income multipliers used in measuring investment worth?

Compare the concept of the overall capitalization rate with the equity dividend rate.

List major factors governing the relative attractiveness of a real estate investment.

Which traditional ratios used in real estate analysis are most closely related to the following concepts used in stock market analysis?

Dividend yield

Price-earnings ratio

Answer 1

                                       INCOME MULTIPLIERS

            Income multiplier is a concept referce to the fact that money can be re-spent , that a dollar can actually generate more than a dollar of ecnomic activity.The income mulitiplier is a valuation tool in real estate.

Example: If you pay a worker $20000, he will spent that money for various activities in various places.These places will re-spent that money and workers. These workers will then spend on and on.

                                    The investment multipliers are refers to that any increase in public or private investment spending has a more than propotionate positive impact on aggregate income and the general ecnomy.

* These multipliers are help to quantify the additional effects of investment spending beyond thoes immediately measurable.

* If larger an investment multiplier, the more efficient it is in creating wealth throughout the economy

* It try to determine the economic impact of public or private investment

         CAPITALIZATION RATE AND EQUITY DIVIDEND RATE

CAPITALIZATION RATE	EQUITY DIVIDEND RATE
Cap rate is used in real estate to indicate the rate of return that is expected to be generated on real estate investment property	This is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price
Help to quickly compare the relative value of similar real estate investment in the market	Healp to assess the sustainability of a company's dividends
There are no clear range for a good or bad cap rate	The eqity dividend rate shows the return on the money actualy invested

     1. Divident discount model is used to value cash flow producing in real estate investments.

    2 Estimating cost of equity by using capital asset pricing model