Regulation, the capital-asset pricing model, and the arbitrage pricing theory

Journal Article · Thu May 26 04:00:00 EDT 1983 · Public Util. Fortn.; (United States)

OSTI ID:5998951

Roll, R W ^[1]; Ross, S A

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1. Univ. of California, Los Angeles

This article describes the arbitrage pricing theory (APT) as and compares it with the capital-asset pricing model (CAPM) as a tool for computing the cost of capital in utility regulatory proceedings. The article argues that the APT is a significantly superior method for determining equity cost, and demonstrates that its application to utilities derives more-sensible estimates of the cost of equity capital than the CAPM. 8 references, 1 figure, 2 tables.

• OSTI ID: 5998951
• Journal Information: Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 111:11; ISSN PUFNA
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
290200 -- Energy Planning & Policy-- Economics & Sociology
296000* -- Energy Planning & Policy-- Electric Power
CALCULATION METHODS
CAPITALIZED COST
COMPARATIVE EVALUATIONS
COST
ECONOMIC ANALYSIS
ECONOMICS
PUBLIC UTILITIES