<abstract xmlns="http://www.w3.org/1999/xhtml">

<p>The Paper discusses the derivation of the Ellwood formula on the basis of the Transactional Asset Pricing approach to valuation (TAPA) and proceeding from the dynamic principle of transactional equity-in-exchange.</p>
<p>Discussing the notion of leverage, it introduces a formulation, in capitalized value terms, and measurement, for leverage benefits to a property purchaser. It is found that such a measure for the Ellwood formula is always zero, essentially obviating any-gains-from-trade to the purchasers of property to be had on account of leveraged transactions. To address this weakness in the Ellwood formula, a modified formula is proposed, which accounts for the requirement of positivity of leverage benefits to the purchaser of property.</p>
</abstract>

The Paper discusses the derivation of the Ellwood formula on the basis of the Transactional Asset Pricing approach to valuation (TAPA) and proceeding from the dynamic principle of transactional equity-in-exchange.
Discussing the notion of leverage, it introduces a formulation, in capitalized value terms, and measurement, for leverage benefits to a property purchaser. It is found that such a measure for the Ellwood formula is always zero, essentially obviating any-gains-from-trade to the purchasers of property to be had on account of leveraged transactions. To address this weakness in the Ellwood formula, a modified formula is proposed, which accounts for the requirement of positivity of leverage benefits to the purchaser of property.

The Transactional Asset Pricing Approach(TAPA): Incorporation of Leverage and Derivation of Extended Ellwood Formula with Fixed Leverage Benefits

The Westminster International University in Tashkent, WIUT

Real Estate Management and Valuation

This work is licensed under the Creative Commons Attribution 4.0 International License.

The Paper discusses the derivation of the Ellwood formula on the basis of the Transactional Asset Pricing approach to valuation (TAPA) and proceeding from the...

The Transactional Asset Pricing Approach(TAPA): Incorporation of Leverage and Derivation of Extended Ellwood Formula with Fixed Leverage Benefits

Online veröffentlicht: 13. März 2021

Seitenbereich: 54 - 71

DOI: https://doi.org/10.2478/remav-2021-0006

Schlüsselwörter
Ellwood formula, Transactional Asset pricing Approach (TAPA), leverage benefits, property valuation, the principle of transactional equity-in exchange

© 2021 Vladimir B. Michaletz et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

The Transactional Asset Pricing Approach(TAPA): Incorporation of Leverage and Derivation of Extended Ellwood Formula with Fixed Leverage Benefits

Online veröffentlicht: 13. März 2021

Seitenbereich: 54 - 71

DOI: https://doi.org/10.2478/remav-2021-0006

SchlüsselwörterEllwood formula, Transactional Asset pricing Approach (TAPA), leverage benefits, property valuation, the principle of transactional equity-in exchange

© 2021 Vladimir B. Michaletz et al., published by Sciendo

This work is licensed under the Creative Commons Attribution 4.0 International License.

Schlüsselwörter
Ellwood formula, Transactional Asset pricing Approach (TAPA), leverage benefits, property valuation, the principle of transactional equity-in exchange