Regulation, the capital-asset pricing model, and the arbitrage pricing theory
Journal Article
·
· Public Util. Fortn.; (United States)
OSTI ID:5998951
- 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), Vol. 111:11
- Country of Publication:
- United States
- Language:
- English
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