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- Publisher
- Wiley
- Copyright
- © The Southern Finance Association and the Southwestern Finance Association
- ISSN
- 0270-2592
- eISSN
- 1475-6803
- DOI
- 10.1111/j.1475-6803.1991.tb00656.x
- Publisher site
- See Article on Publisher Site
Abstract
Capital asset pricing model (CAPM) and alternative arbitrage pricing theory (APT) methodologies are used to estimate the cost of capital for a sample of electric utilities. The statistical factors APT method is found to produce significantly different estimates depending on the number of factors specified and the set of firms factor analyzed. The use of macroeconomic factors is explored, and it is shown that this methodology has advantages over the statistical factors APT and the market model.
Journal
The Journal of Financial Research – Wiley
Published: Sep 1, 1991