Answer :
The equity dividend rate is calculated by dividing the before-tax cash flow by the equity investment.
The ratio of a year's worth of before-tax cash flow to the equity investment in the property is known as the equity dividend rate, also known as the equity capitalization rate and cash on cash return.
An equity dividend rate, which is frequently employed by real estate investors, is a helpful indicator to ascertain an investment's yearly return in relation to the capital invested. This indicator, often known as the cash-on-cash return, focuses solely on the actual cash invested in a property rather than the purchase price. In summary, using the equity dividend rate is a great technique to estimate a real estate investment's yearly profitability. The return on the real investment is shown by the equity dividend rate.
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