Market capitalization method
Market capitalization method(i) In general. The market capitalization method applies the comparable uncontrolled transaction method of 1.4824(c), or the comparable uncontrolled services price method described in 1.4829(c), to evaluate whether the amount charged in a PCT, or group of PCTs, is arm's length by reference to the average market capitalization of a controlled participant (PCT Payee) whose stock is regularly traded on an established securities market. The market capitalization method is ordinarily used where substantially all of the PCT Payee's nonroutine contributions to the PCT Payee's business are covered by a PCT or group of PCTs.
(i)In general.The market capitalization method applies the comparable uncontrolled transaction method of 1.4824(c), or the comparable uncontrolled services price method described in 1.4829(c), to evaluate whether the amount charged in a PCT, or group of PCTs, is arm's length by reference to the average market capitalization of a controlled participant (PCT Payee) whose stock is regularly traded on an established securities market. The market capitalization method is ordinarily used where substantially all of the PCT Payee's nonroutine contributions to the PCT Payee's business are covered by a PCT or group of PCTs.