6) Of particular importance is the equity yield rate ([Y.
In addition, if property B is reconstructed to include a conventional mortgage equity relationship, its equity yield rate can be estimated.
Testing the capitalization rate by considering such items as the implied debt coverage ratio, equity dividend rate, and equity yield rate should be part of the direct capitalization analysis.
Do the implied equity dividend and equity yield rates match the expectations of the typical purchaser?
In the income capitalization approach, the increased equity return requirement, over the market return for an uncontaminated but otherwise similar property, can be measured as a risk premium adjustment to the equity yield rate.
These risk perceptions may result in a higher equity yield rate, more conservative credit underwriting, or both.
The first part of Akerson's format closely resembles the simple band of investment method with one important difference: The equity rate used here is the equity yield rate ([Y.
An excellent reference on how to calculate equivalent level income can be found in Course 510, Session 6: "Stabilizing Income and Yield Capitalization (DCF) Using an Equity Yield Rate.
As explained, these adjustments could include [TABULAR DATA FOR TABLE 1 OMITTED] a lowered LTVR, an increased interest rate, a reduced term or amortization period, and increases in the equity yield rate
An appraiser could attempt to determine whether, for income-producing properties that have been sold, there was a change in the equity yield rate
Valuing the mortgagee's participation required the appraiser to select an appropriate equity yield rate
, a return that an investor would require to take a position subordinate to other, superior claims against the income stream.
This is defined as an equity yield rate
, and instructions for its derivation are that "When income is expected to change on a curvilinear basis or constant-ratio basis, formulas must be used to solve for the yield.