Regulatory Finance and Accounting
Cost of Capital and Allowed Rates of Return

The Brattle Group has developed innovative methods to estimate the cost of capital at a line-of-business level for companies considering vertical disintegration, for firms entering foreign markets, and for companies facing radical changes to their cost structure. These techniques supplement traditional measures (such as DCF or CAPM) with structured models of risk and careful analogies to other industries or time frames.

We frequently provide expert testimony before regulatory bodies, courts, and arbitration panels regarding appropriate cost of capital, allowed rate of return, and discount rate.

Effect on the Cost of Capital of Ratemaking that Relaxes the Linkage between Revenue and kWh Sales: An Updated Empirical Investigation of the Electric Industry
November 2016
Michael J. Vilbert, Joseph B. Wharton, Shirley Zhang, and James Hall
Published by The Brattle Group, Inc.