Section 361.427 - Stock and debt approach indicator of value1. The stock and debt approach proposes a value for the entire firm, but is generally recognized as a less applicable methodology for determining the value of taxable property.2. The stock and debt indicator is determined by multiplying either the average monthly, quarterly or annual high and low market price quotations, when available, for all the securities which are actively traded in the market place, including common stock, preferred stock and long-term debt, by the number of shares outstanding at the end of the year. Computations of the present worth of income flows may be made to determine values for securities which are not actively traded.3. The value of the stock of a holding company is apportioned among its operating companies according to the ratio of:(a) Each operating company's property to the aggregate property of all of the operating companies, valued at historical cost and weighted at one-third; and(b) Each operating company's net income before income taxes to the aggregate net income of all of the operating companies, weighted at two-thirds. For the industry group of rail transportation, the direct deduction method to eliminate nonoperating assets will be used when the information is available and considered applicable.
4. To this amount will be added items such as customer advances for construction which are nontaxable for federal income tax purposes, current liabilities less dividends declared, the present worth of leased property over the period of the lease together with any other items conforming to the theory that if a person were to purchase all the stock and assume all the outstanding liabilities of a company, the person would have acquired all the assets which appear on the asset side of the balance sheet and, therefore, own the company.5. From this amount will be deducted the market value of all exempt or nonoperating property, including, but not limited to, cash, accounts receivable, notes receivable, miscellaneous investments, temporary investments, nonoperating properties and other current and accrued assets and properties not subject to the ad valorem property tax imposed by NRS 361.315 and 361.320.Nev. Admin. Code § 361.427
Added to NAC by Tax Comm'n, eff. 9-30-88; A by R085-98, 11-23-98