Which factor is NOT considered when determining a capitalization rate?

When determining a capitalization rate, the main focus is on factors that influence the expected return on investment and the risks associated with the business. The capitalization rate is essential in valuing a business as it reflects the risk and the future income potential of that business.

The stability of earnings, the nature of the business, and the risk involved are all crucial factors in this calculation. A stable earnings pattern generally leads to a lower capitalization rate because it indicates less risk for investors. Similarly, the nature of the business affects the risk profile; different industries carry varying levels of risk, impacting the required rate of return.

In contrast, a company's market share is not typically considered a direct factor in determining the capitalization rate. While market share can influence a company's overall health and prospects, it does not directly inform the expected return or the inherent risk of the investment in the context of capitalization. Therefore, it is appropriate to conclude that market share is not a primary factor in this specific calculation.