Quote:
Originally Posted by GGG
Ah so you now agree with me all that matters is the discount rate.
It’s only the discount rate that matters in terms of gaining any kind of cap advantage. If the discount rate is 7.5% and the player accepts a contract with 6.5% then the team saves the 1% cap hit.
The player has to take less than the NPV of the deferred rate using LIBOR + 1.25% to generate tax savings. But that isn’t special it’s just the player taking slightly less NPV. There is no magic cap space created outside of the player taking a lower discount rate as part of his chosen investment portfolio.
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I haven’t changed my perspective so I’ve been either always agreeing with you, or you’re not coming to terms with the fact that you’ve actually just taken less NPV in this conversation.