NAC361.226. “Band-of-investment” defined.

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“Band-of-investment” means a method used to compute a capitalization rate in the absence of market information. The simplest form of band-of-investment computation requires estimating the appropriate ratio of debt to equity, the interest cost of debt and, typically the most subjective element, the rate of return on equity capital. The weighted rates on debt and equity are added to obtain the band-of-investment rate.

[Tax Comm’n, Property Tax Reg. part No. 15, eff. 10-30-79]

                    
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