A cap rate helps determine if a real estate investment is worth pursuing. The cap rate formula involves dividing a property's net operating income (NOI) by its purchase or appraised value.

As market prices move, the market cap becomes a real-time estimate of the company's value. The formula for market capitalization is: Market Cap = Current Share Price * Total Number of Shares ...

Firms often use it as a capital budgeting threshold for the required rate of return. The traditional formula for the cost of equity is the dividend capitalization model and the capital asset ...