What is the valuation approach which is described as follows: "An estimated market value made by comparing recent sales figures to provide a return required by investors based on the income stream paid to investors less normal operating expenses"?

Question

Quizplus · Accepted Answer

The description provided in the question relates to the capitalisation approach, which estimates the value of an asset by dividing its expected income stream by the required rate of return. This approach is commonly used in real estate and other forms of investment analysis. The other options listed (cost approach, direct comparison approach, securitisation approach) do not match the given description.

What Is the Valuation Approach Which Is Described as Follows