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Overview"This book spells out the advantages and disadvantages of the major methods used to estimate the required rate of return. One of the most contentious questions in public utility regulation is what ""fair"" rate of return to allow investors. This book spells out the advantages and disadvantages of the major methods used to estimate the required rate of return. It is a thorough review and critique that will prove valuable to all members of the regulatory community - commissions and their staff, legal and management counsel, and intervenors - and to students of finance and regulation. The point of departure is the cost of capital as a concept and the rationale for setting the allowed rate of return equal to the cost of capital. On this basis a comprehensive set of evaluation criteria are developed, including theoretical, practical, and empirical aspects. With the conceptual and methodological framework established, the authors proceed to evaluate the five major estimation methods: comparable earnings, discounted cash flow, capital asset pricing model, risk positioning, and market-to-book ratio. In addition, they survey new methods of estimating the cost of capital, such as the Arbitrage Pricing Theory, that are likely to be used more frequently in the future. Several related topics are treated in appendices. The goal of the book is not to choose a single ""best"" method, but to provide a systematic assessment of the strengths of each." Full Product DetailsAuthor: A. Lawrence Kolbe , James A. Read, Jr. , George R. HallPublisher: MIT Press Ltd Imprint: MIT Press Dimensions: Width: 15.50cm , Height: 2.00cm , Length: 23.10cm Weight: 0.340kg ISBN: 9780262612128ISBN 10: 0262612127 Pages: 191 Publication Date: 31 August 2005 Recommended Age: From 18 years Audience: Professional and scholarly , Professional & Vocational Format: Paperback Publisher's Status: Active Availability: In Print This item will be ordered in for you from one of our suppliers. Upon receipt, we will promptly dispatch it out to you. For in store availability, please contact us. Table of ContentsReviewsAuthor InformationLawrence Kolbe is Vice President of Charles River Associates in Boston. James Read is Senior Research Associate at Charles River Associates in Boston. George R. Hall is Vice President of Charles River Associates in Boston. Tab Content 6Author Website:Countries AvailableAll regions |