STB calculates roads' cost of capital for '08

摘要

Last month, the Surface Transportation Board (STB) announced it calculated the 2008 cost of capital for the rail industry, including the Class Is.rnThe board determined the industry's after-tax cost of capital was 11.75 percent compared with 11.33 percent in 2007. The STB uses the cost-of-capital figure when evaluating the adequacy of individual railroad's revenues each year. The calculation also is used to help determine the reasonableness of a challenged rail rate, consider a line abandonment proposal or place a value on a particular railroad's operation.