Alternative measures of the Federal Reserve Banks' cost of equity capital

Research, Preprint English OPEN
Michelle L. Barnes; Jose A. Lopez;
  • Publisher: Boston, MA: Federal Reserve Bank of Boston
  • Subject: Kapitalkosten | USA | return on equity | G11 | G28 | Zahlungsverkehr | payments system | CAPM | Financial services industry ; Federal Reserve banks - Service charges ; Federal Reserve banks - Costs | Capital Asset Pricing Model | Zentralbank | Messung | cost of equity | Capital assets pricing model ; Payment systems
    • ddc: ddc:330

The Monetary Control Act of 1980 requires the Federal Reserve System to provide payment services to depository institutions through the twelve Federal Reserve Banks at prices that fully reflect the costs a private-sector provider would incur, including a cost of equity ... View more
  • References (27)
    27 references, page 1 of 3

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    Board of Governors of the Federal Reserve System, 1990. “The Federal Reserve in the Payments System,” Federal Reserve Bulletin, May, 293-298.

    Board of Governors of the Federal Reserve System, 2005. “Federal Reserve Bank Services Private Sector Adjustment Factor,” Press release, October 15.

    Bower, D.H., Bower, R.S. and Logue, D.E., 1984. “Arbitrage Pricing Theory and Utility Stock Returns,” Journal of Finance, 39, 1041-1054.

    Bruner, R.F., Eades, K.M., Harris, R.S. and Higgins, R.C., 1998. “Best Practices in Estimating the Cost of Capital: Survey and Synthesis,” Financial Practice and Education, 8, 13-28.

    Committee on the Federal Reserve in the Payments Mechanism. 1998. The Federal Reserve in the Payments Mechanism. Washington, D.C.: Federal Reserve System.

    Cummins, J.D. and Phillips, R.D., 2003. “Estimating the Cost of Equity Capital for PropertyLiability Insurers,” Working paper #03-17, The Wharton Financial Institutions Center.

    Damodaran, A., 2001. Corporate Finance: Theory and Practice. New York: John Wiley & Sons, Inc.

    Division of Federal Reserve Bank Operations, Board of Governors of the Federal Reserve System, 1983. “Private Sector Adjustment Factor for 1984,” Federal Register, October 18, Issue 202, 48288-48295 [Docket No. R-0485].

    Ehrhardt, M.C. and Bhagwat, Y.N., 1991. “A Full-Information Approach for Estimating Divisional Betas,” Financial Management, 20, 60-69.

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