Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our User Agreement and Privacy Policy.
Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our Privacy Policy and User Agreement for details.
Published on
The weighted average cost of capital (WACC) methodology is a widely accepted method for calculating the allowed rate of return. Regulators use different models to set the allowed cost of capital. This section explains the models and their practical application.
· Definition of cost of capital
o WACC
o Cost of equity
o Cost of debt
o Capital structure (gearing)
o Treatment of taxes
· Quantification of cost of capital
o CAPM (Capital Assets Pricing Model)
o Price Arbitrage Theory
o Dividend Growth Model
o Comparable Earnings Model
o “Precedent Case” Approach
· Financial Analysis
Clipping is a handy way to collect and organize the most important slides from a presentation. You can keep your great finds in clipboards organized around topics.