1. 13 Anatomising the connote of capitalization rate and arising a view that capitalization rate should be the add of industry fiducial return and opportunity interest and less than industry IRR.

2. An appropriate capitalization rate is applied to the excess return, resulting in the value of those intangible assets.

3. 3 Thus, the appropriate capitalization rate for any financial asset is a function of the riskiness of the asset.

4. Earnings capitalization rate. This is the ratio of the share price to the earnings per share of a given company.

5. 15 The first concern is determining the appropriate earnings to be capitalized. the second is determining the appropriate capitalization rate.