• Vicary, Bret Potter
  University of Maine Graduate School
  

The problem of selecting an appropriate rate at which to capitalize anticipated income into an estimate of present value has been the subject of much debate in recent years. The intensity of discussion surrounding the matter is entirely warranted, for the problem is crucial to nearly all investment analysis. One of the unfortunate aspects of the issue lies in the fact that much of the research has been focused largely upon theory, at the expense of analyzing what the marketplace is actually doing. This, however, is unfortunate only for those who seek to duplicate the thought process of the market. The other constituents who are more concerned with pure investment analysis or capital budgeting have hopefully derived significant benefits from keeping abreast of the literature. Timberland appraisers should be encouraged by the minority of research which has probed the actions of the market participants. Several of these studies are referred to later in  this chapter, and Part II of this work falls into the same category of research.