The Past and the Present: Adapting to Change
The discussion of methodologies in Chapter 11 indicated that judgment in determining the rate of return was inevitable not because of flaws in the methodologies but because of data definition and measurements of expectational parameters. In Chapter 7 it was noted that changing conditions in economic and financial markets as well as in the firm itself subjected the rate of return analysis to substantial error in application to an individual firm. In this chapter, an attempt is made to analyze the response of the various models and their respective methodologies to changing economic environments.
KeywordsInterest Rate Cash Flow Require Rate Public Utility Regulatory Finance
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