Regulation, the capital-asset pricing model, and the arbitrage pricing theory

摘要: This article describes the arbitrage pricing theory (APT) as and compares it with capital-asset model (CAPM) a tool for computing cost of capital in utility regulatory proceedings. The argues that APT is significantly superior method determining equity cost, demonstrates its application to utilities derives more-sensible estimates than CAPM. 8 references, 1 figure, 2 tables.