Fair rate of return - Definition

The Rate of Return that governments allow a public utility to earn on its investments and expenditures. The fair rate of return is determined such that it meets the operational expenses of the utility, continues to serve its customer as well as pay adequate dividends to shareholders and interest to bondholders. Examples of such utilities include water treatment plants, power stations, hydro departments etc.

Terms near "Fair rate of return"

Fair rental value coverage
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