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Discounted cash flow versus the capital-asset pricing model (is g better than b)

Journal Article · · Public Util. Fortn.; (United States)
OSTI ID:6586632

The author compares the relative merits of discounted cash flow (DCF) and the capital-asset pricing model (CAPM) to see if the recent interest in CAPM as a way for utilities to determine cost rate of equity capital is warranted. He identifies a number of inadequacies in the CAPM approach and concludes that it is less applicable than the more traditional DCF method. He also feels that it requires too sophisticated a knowledge of economics and finance to be generally useful.

Research Organization:
Troupe Kehoe Whiteaker and Kent, Kansas City, MO
OSTI ID:
6586632
Journal Information:
Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 102:6; ISSN PUFNA
Country of Publication:
United States
Language:
English

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