Rate-of-Return Attrition and Inflation-Induced Penalties in Public Utility Common Stocks

Abstract

While the rate of inflation seems to be easing, the interest in its impact on corporate security prices (Feldstein, 1980) and on corporate investment policy (Caks, 1981; Higgins, 1977) has continued. Unlike nonregulated firms, utilities face the added difficulties of regulation-induced inflation penalties and return on equity (ROE) attrition.

Keywords

Rate of return attrition Public utility stocks Corporate investment policy Regulation induced inflation penalties

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References

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