direct capitalization - real estate - usa - This is a method used to convert an estimate of a single years income expectancy into an indication of value in one direct step. This can be done either by dividing the net income estimate by an appropriate capitalization rate of by muliplying the income estimate by an appropriate factor. Direct capitalization employs mulitpliers and capitalization rates developed or extracted from market data. Only a singles income is used. The yield and value changes are implied but not identified.