The lease multiplier developed by credit rating agencies to estimate the capitalized value of long-term operating leases is calculated as 1 divided by the discount rate.

Question

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The lease multiplier is calculated as the present value of $1 received at the end of each year of the lease term, discounted at the discount rate. The present value of $1 received at the end of each year of the lease term is calculated as 1 divided by the discount rate.

The Lease Multiplier Developed by Credit Rating Agencies to Estimate