[bsanr2]

>To value cash flowing assets, one can use a number of methodologies such as discounted cash flow, capitalization rate/rental yield and valuation multiples (i.e. EV/EBITDA, EV/EBIT and P/E). These methods are not perfect and are rough approximations in a hard-to-model world. To give an example, when looking to buy a rental property, I might look at the rental yield after costs of say $10k. Using the capitalization rate method and assuming a cost of capital of 7%, the property would be valued at ~$143k by dividing ~$10k by 7%. Now this is a simple example which does not include debt/leverage but hopefully you get the point.

I understand that a jargon avalanche is part of the way finance and investing is effectively gate-kept, but boy is it annoying that, every time I try to read an article on the subject, I feel like I'm pulling up a particularly convoluted page out of the Silmarillion or a Final Fantasy Ultimania guide.

At any rate, is this what he's saying?:

$10k costs * (7% capital units/cost)

Or is the $10k rental-yield-after-costs? In which case I'm completely lost.