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WACC |
Also found in: Financial, Wikipedia, Hutchinson | 0.07 sec. |
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482-7(i)(6) provides that the applicable discount rate (ADR) will be the WACC of the PCT Payor if it (or its consolidated group parent) is publicly traded in the United States, unless the Commissioner determines (or the participants establish to the Commissioner's satisfaction) that another discount rate better reflects the degree of risk of the CSA activity. The beta used to determine risk, and from that, cost of equity, WACC, and the discount rate for an institution is a reflection of the risk of the entire organization's cash flow. The company in the example, which picked up three days of liquidity on the A/R side, with a 9 percent WACC, had a recurring annual improvement of $540,000 (note: does not factor in the tax impact). |
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