Narrow search
Showing 1 - 10 of 10,204
Cover Image
An evaluation of different approaches to capital structure regulation
Schaeffler, Stephan - 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 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
Cover Image
WACC and CAPM According to Utilities Regulators : Confusions, Errors and Inconsistencies
Fernandez, Pablo - 2019
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
Cover Image
Cost of Equity and Leverage Under 'Fair' Rate-of-Return Regulation
Srinivasan, R. - 2012
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
Cover Image
An Evaluation of Different Approaches to Capital Structure Regulation
Schaeffler, Stephan - 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 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
Cover Image
Investment, protection, ownership, and the cost of capital
Himmelberg, Charles P.; Hubbard, R. Glenn; Love, Inessa - 2002
We investigate the cost of capital in a model with an agency conflict between inside managers and outside shareholders. Inside ownership reflects the classic tradeoff between incentives and risk diversification, and the severity of agency costs depends on a parameter representing investor...
Persistent link: https://www.econbiz.de/10011623466
Cover Image
Information, Investment Adjustment, and the Cost of Capital
Huang, Lixin - 2017
Private information imposes a severe trading disadvantage on uninformed traders while at the same time providing firms with valuable signals for investment adjustment. The two forces have opposite impacts on the cost of capital, and the net effect depends on which force dominates. We show that...
Persistent link: https://www.econbiz.de/10012973367
Cover Image
Miles-Ezzell's WACC approach yields arbitrage
Löffler, Andreas - 2002 - This version: July 2002
A simple counterexample shows the the widely used WACC approach to value leverage firms developed by Miles and Ezzell can create an arbitrage opportunity. The only consequence to be drawn is that their WACC approach cannot be applied under the circumstances assumed by Miles and Ezzell.
Persistent link: https://www.econbiz.de/10011526007
Cover Image
Agency costs, credit constraints and corporate investment
Hansen, Sten - 1999
The importance of credit market imperfections for investment behavior is analyzed using Swedish firm level data. Adjustment and agency costs are included in the neoclassical theory of optimal financial and investment decisions for firms. In order to model the possible occurrence of agency costs...
Persistent link: https://www.econbiz.de/10011583878
Cover Image
Assessing the non-financial investment profitability with variable discount rate
Gwóźdź, Katarzyna - 2015
In the work, the subject of the discount rate assessment is presented. It is crucial as regards assessing the non-financial investment profitability. The discount rate is usually considered as constant one in the whole investment period, which seems to be the main problem. The constant discount...
Persistent link: https://www.econbiz.de/10012010917
Cover Image
Firm-level investment spikes and aggregate investment over the Great Recession
Disney, Richard; Miller, Helen; Pope, Thomas - 2018
Firm-level investment paths are commonly characterised by periods of low or zero investment punctuated by large investment ‘spikes’. We document that such spikes are important for understanding firm and aggregate level investment in the UK. We show that annual variation in aggregate...
Persistent link: https://www.econbiz.de/10011817429