The Determinants of Systematic Risk and the Cost of Capital for the Regulated Electric Utility Industry (Classic Reprint) - Softcover

Bruce Edward Stangle

 
9781332258192: The Determinants of Systematic Risk and the Cost of Capital for the Regulated Electric Utility Industry (Classic Reprint)

Synopsis

This book delves into the fascinating world of the regulated electric utility industry, exploring the factors that influence systematic risk and the cost of capital for these companies. The author's work examines this subject in the context of the 1960s and 1970s, a period marked by significant economic and regulatory shifts. By applying the Capital Asset Pricing Model (CAPM), a tool of financial theory that models market equilibrium under risk, the author unravels the complex interplay between financial, regulatory, and industry-specific variables that determine the cost of capital for electric utilities. The book meticulously investigates the impact of accounting practices, regulatory constraints, economic conditions, and investor expectations on the industry's risk profile. Ultimately, this insightful analysis reveals the crucial role that regulatory policy plays in shaping the performance of the electric utility industry, highlighting the delicate balancing act regulators must undertake to ensure fair market conditions while safeguarding consumer interests.

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