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The Effect of Debt The Effect of Debt
On the Cost of EquityOn the Cost of Equity
In a Regulatory Setting
Prepared by:
The Brattle Group
Prepared for:
Edison Electric Institute
January 2005
© 2005 by the Edison Electric Institute (EEI).
All rights reserved. Published 2005.
Printed in the United States of America.
No part of this publication may be reproduced or transmitted in any form or by any means, electronic or
mechanical, including photocopying, recording, or any information storage or retrieval system or
method, now known or hereinafter invented or adopted, without the express prior written permission of
the Edison Electric Institute.
Attribution Notice and Disclaimer
This work was prepared by the Edison Electric Institute (EEI). EEI, any member of EEI, and any person
acting on its behalf (a) does not make any warranty, express or implied, with respect to the accuracy,
completeness or usefulness of the information, advice or recommendations contained in this work, and
(b) does not assume and expressly disclaims any liability with respect to the use of, or for damages
resulting from the use of any information, advice or recommendations contained in this work.
The views and opinions expressed in this work do not necessarily reflect those of EEI or any member of
EEI. This material and its production, reproduction and distribution by EEI does not imply endorsement
of the material.
Published by:
Edison Electric Institute
701 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-2696
Phone: 202-508-5000
Web site:
The Effect of Debt on the Cost of Equity in a Regulatory Setting
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