Capitalization Rate

Measures the rate of return of company stock.

The Capitalization Rate measures the rate of return on one share of company stock by comparing the Earnings per Share to the price of one share of stock.

A high, or increasing Capitalization Rate is usually a positive sign, showing that the company may be able to provide a healthier return for its stockholders. If there have been changes in the stock price, other reasons should be investigated as to why these changes occurred.

Tags: Financial Ratio