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Capitalization Rate Study

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The Minnesota Department of Revenue develops a Capitalization Rate Study yearly. We use the capitalization rates published in the study to help determine the unitary value of state assessed property as of January 2 each year. State assessed property includes utility, pipeline, and railroad operating property.

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How does the department complete the study? [+]

We determine the following rates:

Yield capitalization
Direct capitalization
Implied growth

Short-term growth
Long-term growth
Implied inflation

For each of these market segments:

Electric
Gas distribution
Gas transmission pipeline

Fluid transportation pipeline
Railroads

Yield and direct capitalization rates: combined rates of debt and equity components using capital structure indicated by the market.

Implied growth rate: difference between the yield and direct rates, by market segment.

Short-term growth rate: estimates of growth by market segment.

Long-term growth rate: long-term growth rate of the United States Economy.

Implied inflation rate: market indicators of expected inflation.

How can I view the study? [+]

Questions?

If you have questions, email us at sa.property@state.mn.us.

Contact Info

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Last Updated

April 24, 2020