... depreciation schedule. For long‐lived assets, benchmarking against the yield‐to‐maturity on long‐dated Government securities results in a far closer approximation of the appropriate return than the use of short‐term rates. © Emerald Group Publishing Limited 2007 Risk free rate Corporate debt Cash...

...Martin Lally This paper examines the appropriate term of the risk free rate to be used by a regulator in price control situations, most particularly in the presence of corporate debt. If the regulator seeks to ensure that the present value of the future cash flows to equity holders equals...

... argues that this result implicitly assumes that forward rates equal expected spot rates. If this were true, it would undercut Lally’s analysis because the empirical evidence does not support the alleged assumption. Risk free rate Corporate debt Cash flows Rejoinder: Regulation and the Term...