Fair Rate of Return
Financial & Investment Dictionary:
Fair Rate of Return
Home > Library > Business & Finance > Finance and Investment Dictionary ...
FAIR RATE OF RETURN - The rate of return that state governments allow a public utility to earn on its i...
FAIR VALUE - An accounting term defined by FASB. The amount at which an asset could be bought or sold i...
fair rate of return
level of profit that a utility is allowed to earn as determined by federal and/or state regulators.
Fair price provision See:Appraisal rights Fair rate of return The rate of return that state governments allow a public utility to earn on its investments and expenditures.
Even during the prosperous 1920s, railroad earnings never reached what the act indicated might be a fair rate of return. New competition from the growing trucking industry presented a major problem for the railroads.
Determine a fair rate of return on these assets.
Subtract the return from the total business earnings. The difference is the excess earnings.
Capitalize the excess earnings to determine business goodwill.
Bubbles are often described as speculative and it is conjectured that bubbles could be risky ventures for speculators who earn a fair rate of return on them. [ed: I believe these are "rational" bubbles.]
There exist statistical models of a bubbles.
The great thing about average-cost pricing is that a regulated public utility is guaranteed a normal profit, usually termed a fair rate of return.
 See also: Public utility, Saving, Values, Rate base, Acquisitions
  
|
RSS
