The Capitalisation Rate is the multiple or divisor used to convert anticipated economic benefits (adjusted income) of a single period into fair market value. It is the multiple or divisor used to convert anticipated economic benefits (adjusted income) of a single-period into fair market value and typically contains all risk elements. The capitalisation rate is different from the discount rate in that while the capitalisation rate is used to convert a single-period income into value, the discount rate is used to convert a stream of future cash flows into the present value. The other distinction is that the capitalisation rate does not take into consideration the capital structure or leverage of the business entity whereas the discount rate, the weighted average cost of capital, takes the leverage into account. The capitalisation rate can be derived from the Ibbotson Build-Up Method as: