The capitalisation approach results in:

Question

Quizplus · Accepted Answer

According to the capitalisation approach, the market value of a property is calculated by dividing its net operating income by the capitalisation rate. Therefore, a higher capitalisation rate results in a lower market value, and vice versa. However, the relationship between market value and net rental income stream is not straightforward, so option A and C are incorrect. Option D is also incorrect as it contradicts the correct answer.

The Capitalisation Approach Results In