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Commerce Commission’s WACC announcement
30 October 2014
Commerce Commission’s WACC announcement
Auckland Airport has received the Commerce Commission’s final report on proposed changes to the Weighted Average Cost of Capital (WACC) for the price-controlled, electricity and gas sectors.
Adrian Littlewood, Auckland Airport’s chief executive, says, “This report from the Commerce Commission on WACC does not directly impact Auckland Airport.”
“As we highlighted when the draft report was published by the Commission in July this year, the Commission is separately considering whether it needs to make any changes to its WACC estimation range for monitoring airports. We will continue to work with the Commission during this review process.”
WACC is the cost of raising capital, either through debt or equity. Although not mandatory, once finalised the Commission's WACC methodology for airports will be an important reference point for airports in setting charges. It will be used by the Commission to monitor aeronautical returns over time.
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