A Highly Personal Comment on on the Use of the CAPM in Public Utility Rate Cases

Professors Brigham and Crum (hereafter BC) have performed a valuable service in their article [3]. They have brought to the attention of academicians a controversy that since the Breen/Lerner [1] and Myers [10] interchange had been argued over primarily in the trenches -- utility rate hearings. The...

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Bibliographic Details
Published in:Financial management 1978-10, Vol.7 (3), p.57-59
Main Author: Carleton, Willard T.
Format: Article
Language:English
Subjects:
Book value
Business structures
Capital
Capital asset pricing models
Capital assets
Capital costs
Compound interest
Cost estimates
Cost of equity
Economic regulation
Equity capital
Financial management
Hearings
Income distribution
Interest rates
Investment return rates
Investments
Pricing
Public utilities
Rate restructuring
Rate setting
Rates of return
Regulated industries
Regulation
Risk
Testimony
Treasury bills
Utility rate reform
Utility rates
Utility Regulation and the CAPM: A Discussion
Yield
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Summary:Professors Brigham and Crum (hereafter BC) have performed a valuable service in their article [3]. They have brought to the attention of academicians a controversy that since the Breen/Lerner [1] and Myers [10] interchange had been argued over primarily in the trenches -- utility rate hearings. The focus of BC's criticism is quite narrow, calling attention to the effects of risk non-stationarity on measured betas...
ISSN:0046-3892
1755-053X
DOI:10.2307/3665012