Media Kit » Try RailPrime™ Today! »
Progressive Railroading
Newsletter Sign Up
Stay updated on news, articles and information for the rail industry



This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.




railPrime
View Current Digital Issue »


RAIL EMPLOYMENT & NOTICES



Rail News Home Rail Industry Trends

2/15/2008



Rail News: Rail Industry Trends

STB seeks comments on proposed complement to capital asset pricing model


advertisement

ProgressiveRailroading.com's Feb. 12 news item entitled "STB seeks public comments on cost-of-equity calculation change" mischaracterized recent Surface Transportation Board (STB) actions. In a Jan. 17 decision, the board adopted the Capital Asset Pricing Model (CAPM) as the method it employs to determine the rail industry's cost of equity. Previously, the STB used a single-stage discounted cash flow (DCF) model to determine the cost of equity.  

However, the Jan. 17 decision left open the possibility that a multi-stage DCF model might prove acceptable to the board if used in conjunction with the CAPM model. The STB announced in the decision that it would shortly begin a new rulemaking to explore the matter further and made good on that pledge in a Feb. 11 decision.

On Feb. 11, the STB released an advanced notice of proposed rulemaking, "Use of a Multi-Stage Discounted Cash Flow Model in Determining the Railroad Industry's Cost of Capital." In that decision, the board announced it's seeking comments on whether an appropriate multi-stage DCF could complement the CAPM model adopted in January. Comments on that proceeding are due on April 14.


Contact Progressive Railroading editorial staff.

More News from 2/15/2008