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The Capitalization Rate Is the Sum of the Discount Rate

question 34

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The capitalization rate is the sum of the discount rate and the growth rate of the cash flow in the terminal value period.

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Definitions:

Predictive Validity

The extent to which a test score or measure can predict future performance or outcomes.

Concurrent Validity

A measure of how well a particular test correlates with a previously validated measure taken at the same time.

Reliability

The consistency and dependability of a measurement tool or test over time.

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