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Evaluation of Different Approaches to Capital Structure Regulation
Schaeffler, Stephan - Fachbereich Wirtschaftswissenschaften, Universität … - 2012
With the introduction of incentive regulation in many network industries, different approaches how to remunerate … invested capital have been used. Under incentive regulation, many regula-tors remunerate the regulated asset base with a …, i.e. finding the right balance between equity financing and debt. Taggert (1981) shows that rate-of-return regulation …
Persistent link: https://www.econbiz.de/10011156756
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Evaluation of Different Approaches to Capital Structure Regulation
Schaeffler, Stephan - Fachbereich Wirtschaftswissenschaften, Universität … - 2012
With the introduction of incentive regulation in many network industries, different approaches how to remunerate … invested capital have been used. Under incentive regulation, many regula-tors remunerate the regulated asset base with a …, i.e. finding the right balance between equity financing and debt. Taggert (1981) shows that rate-of-return regulation …
Persistent link: https://www.econbiz.de/10010553375
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The Capital Structure of Regulated Firms
Spiegel, Yossef; Spulber, Daniel F. - Center for Mathematical Studies in Economics and … - 1991
regulation. The firm's capital structure is shown to have a significant effect on regulated prices, so that the firm's choice of …
Persistent link: https://www.econbiz.de/10005252357
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Energy Planning in the United States and Europe : A Portfolio-Based Approach
Lowengrub, Paul S. - 2014
Traditional energy planning in Europe and the United States focuses on finding the least-cost generating alternative. This approach worked sufficiently well in a technological era marked by relative cost certainty, low rates of technological progress, technologically homogenous generating...
Persistent link: https://www.econbiz.de/10012709057
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Consistent Valuation Cash Flow
Yaari, Uzi; Nikiforov, Andrei; Kahya, Emel; … - Department of Economics, University of Pennsylvania - 2012
This paper seeks to draw attention to a flaw in the firm’s Free Cash Flow model and related statement widely accepted in Corporate Finance. We argue that the common offset of any Current Liabilities against Current Assets distorts the FCF size, composition, and volatility, thereby misstating...
Persistent link: https://www.econbiz.de/10010544669
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Cost of Capital, Cost of Equity and Value Without Circularity for Constant Growth Perpetuities
Mejía, Felipe; Pareja, Ignacio Velez - MASTER CONSULTORES - 2010
This paper presents a formulation for the cost of equity, the WACC, and the value of equity and firm for growing perpetuities without circularity, using some previous results. We also derive a relationship between leverage, D%, and growth, given a value of debt at instant zero.
Persistent link: https://www.econbiz.de/10010762953
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Cost of Equity and WACC for Perpetuities with Constant Growth
Mejia, Felipe; Pareja, Ignacio Velez - MASTER CONSULTORES - 2010
This paper shows a formulation for the cost of equity and the WACC for growing perpetuities. Some authors have derived the general expressions for those formulas but not specifically for perpetuities with constant growth. The result obtained is that a previously general formulation for a finite...
Persistent link: https://www.econbiz.de/10010827955
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Adjustment of the WACC with Subsidized Debt in the Presence of Corporate Taxes: the N-Period Case
Velez-Pareja, Ignacio; Tham, Joseph; Fernandez, Viviana - EconWPA - 2005
In the Weighted Average Cost of Capital (WACC) applied to the free cash flow (FCF), we assume that the cost of debt is the market, unsubsidized rate. With debt at the market rate and perfect capital markets, debt only creates value in the presence of taxes through the tax shield. In some cases,...
Persistent link: https://www.econbiz.de/10005134868
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Evaluating the Capacity of Standard Investment Appraisal Methods
Akalu, Mehari Mekonnen - Tinbergen Instituut - 2002
The survey findings indicate the existence of gap between theory and practice of capital budgeting. Standard appraisal methods have shown a wider project value discrepancy, which is beyond and above the contingency limit. In addition, the research has found the growing trend in the use of value...
Persistent link: https://www.econbiz.de/10011256495
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A Monte Carlo Comparison between the Free Cash Flow and Discounted Cash Flow Approaches
Akalu, Mehari Mekonnen; Turner, Rodney - Tinbergen Instituut - 2002
One of the debates in the capital budgeting model selection is between the free cash flow and DCF methods. In this paper an attempt is made to compare SVA against NPV model based on Monte Carlo simulations. Accordingly, NPV is found less sensitive to value driver variations and has got higher...
Persistent link: https://www.econbiz.de/10011257488