Measuring return on equity. [Discounted cash flow (DCF) approach for return to encourage investment]
Journal Article
·
· Public Util. Fortn.; (United States)
OSTI ID:7270236
The utility industries face a continuing demand for vast sums of new capital in the years ahead. To attract this capital it is recognized that a reasonable and competitive return must be offered. A key requisite, of course, is a reasonable return on common stock equity. To assist regulators in determining a reasonable return on equity, proper methods of demonstrating investor requirements are essential. This article describes an approach used in a retail rate case filed by the Cleveland Electric Illuminating Company in 1976--one designed with the objectives of simplicity, clarity, and accuracy in mind. A very similar approach was endorsed by a Federal Power Commission member in a concurring opinion in another rate case, Natural Gas Pipeline Company of America (FPC Opinion No. 762).
- Research Organization:
- Ebasco Services Inc., New York
- OSTI ID:
- 7270236
- Journal Information:
- Public Util. Fortn.; (United States), Journal Name: Public Util. Fortn.; (United States) Vol. 99:11; ISSN PUFNA
- Country of Publication:
- United States
- Language:
- English
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