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Regulatory Risk: Objections to the Theory

Chapter
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Part of the Topics in Regulatory Economics and Policy Series book series (TREP, volume 14)

Abstract

Chapter 2 explored the broad consequences of regulatory policies that impose the risk of a substantial loss without an offsetting opportunity for a substantial gain (“asymmetric regulatory risk”). The logic of that chapter contended that the rate of return allowed by regulators must be in excess of the cost of capital in the presence of asymmetric regulatory risk, such as the prospect of large cost disallowances.

Keywords

Cash Flow Stock Price Economic Principle Capital Asset Price Model Regulatory Risk 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Science+Business Media New York 1993

Authors and Affiliations

  1. 1.The Brattle GroupUSA
  2. 2.Sloan School of ManagementMassachusetts Institute of Technology and The Brattle GroupUSA

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