In the capitalization of Earning method, the Capitalization rate is .........

CS Executive · Corporate and Management Accounting · PYQS · June 2023
In the capitalization of Earning method, the Capitalization rate is .........
(A) Capitalization Rate = Growth Rate - Discount Rate
(B) Capitalization Rate = Discount Rate - Growth Rate
(C) Capitalization Rate = Earning Rate - Growth Rate
(D) Capitalization Rate = Growth Rate - Earning Rate

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Valuation of Shares

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