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regulation for utilities firms has made the task of setting an adequate cost of equity more difficult. Firstly, Legal Unbundling … regulation schemes has reinforced the importance of setting the equity return adequately. The approaches chosen by regulatory …
Persistent link: https://www.econbiz.de/10010426697
With the introduction of incentive regulation in many network industries, different approaches how to remunerate … invested capital have been used. Under incentive regulation, many regulators remunerate the regulated asset base with a ….e. finding the right balance between equity financing and debt. Taggert (1981) shows that rate-of-return regulation creates an …
Persistent link: https://www.econbiz.de/10010430806
Regulators of many countries try to find the “true” WACC of Electricity, Gas, Water… activities. All their documents have in common a main confusion: they do not differentiate among expected, required, historical, and regulator allowed returns, which are 4 very different concepts. Most of...
Persistent link: https://www.econbiz.de/10012893723
A rate-of-return regime characterized by "fairness" satisfies two criteria: the total allowed return on the rate base is equal to the cost of capital, and the regulated firm should be able to raise capital without either gain or loss to existing equity holders. Assuming a monopoly firm with a...
Persistent link: https://www.econbiz.de/10013100733
study the effect of regulation on companies' operating fundamentals, growth, leverage, and equity returns. We find that …
Persistent link: https://www.econbiz.de/10012839955
This paper examines four issues associated with the Officer model, in the context of estimating the cost of equity capital for regulatory purposes. The conclusions are thus. First, regarding the issue of foreign investors, continued use of a version of the Capital Asset Pricing Model that...
Persistent link: https://www.econbiz.de/10014199181
With the introduction of incentive regulation in many network industries, different approaches how to remunerate … invested capital have been used. Under incentive regulation, many regulators remunerate the regulated asset base with a ….e. finding the right balance between equity financing and debt. Taggert (1981) shows that rate-of-return regulation creates an …
Persistent link: https://www.econbiz.de/10013104627
Multi-year regulatory rate plans are becoming more common. An agreement to "stay out" of the rate revision process removes an option for the utility company or regulatory commission to request a modification to tariff rates in response to changes in interest rates. We develop an objective...
Persistent link: https://www.econbiz.de/10012936700
We find that Japanese firms that barely met a voluntary minimum pre-COVID-19 regulation (minimal compliers) lost more …
Persistent link: https://www.econbiz.de/10013232331
This essay, based on the author's presentation last September to the annual meeting of the North American Securities Administration Association (NASAA), addresses several issues related to Rule 506, the most widely-used of the SEC's transactional exemptions from federal registration of...
Persistent link: https://www.econbiz.de/10013149128