The Impact of Nuclear Power on the Systematic Risk and Market Value of Electric Utility Common Stock

作者: Russell l. Fuller , George W. Hinman , Thomas C. Lowinger

DOI: 10.5547/ISSN0195-6574-EJ-VOL11-NO2-7

关键词:

摘要: The objective of this study is to determine whether investors perceive utilities with nuclear plants be more risky than no facilities . Two basic analytical frameworks are used. One approach analyze investors' differential perception the market-related systematic risk utility stocks versus non-nuclear stocks. This done by comparing betas second an econometric treatment price book value ratios , using cross-sectional data in time period 1973 1987. For both approaches, differences financial markets' risk, related special events TMI, Chernobyl and WPPSS bond default, analyzed. Based on crosssectional analysis P/BV recent years, we estimate markets valued power at approximately 20% less comparable utilities. We that a 3% increase allowed rate return for (from 13.7% 16.7% 1988) would have been necessary fully offset discount associated power.

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