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A Taxa de Remuneração do Capital e a Nova Regulação das Telecomunicações

Author

Listed:
  • Gabriel Fiuza de Bragança
  • Katia Rocha
  • Fernando Camacho

Abstract

An adequate rate of return on capital yielded by the regulated firms is a central issuerelated to the new cost-based approach adopted by the Brazilian TelecommunicationRegulatory Agency (Anatel). In this context, careful attention must be given to theWeighted Average Cost of Capital (WACC) estimation. Downside bias can harminnovation and infrastructure future investment decisions and upside bias contradictsthe government main directive to reduce tariffs and foster competition, in fact, bothmistakes reduces social welfare.In this respect, the article intends to offer methodological insights, based onwell-accepted theoretical achievements and best practices abroad, for the task ofestimate a telecom WACC taking account of specific regulatory and sectorialBrazilian characteristics.

Suggested Citation

  • Gabriel Fiuza de Bragança & Katia Rocha & Fernando Camacho, 2006. "A Taxa de Remuneração do Capital e a Nova Regulação das Telecomunicações," Discussion Papers 1160, Instituto de Pesquisa Econômica Aplicada - IPEA.
    • Handle: RePEc:ipe:ipetds:1160
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    References listed on IDEAS

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    1. Stephen A. Ross, 2013. "The Arbitrage Theory of Capital Asset Pricing," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 1, pages 11-30, World Scientific Publishing Co. Pte. Ltd..
    2. Pindyck Robert S., 2007. "Mandatory Unbundling and Irreversible Investment in Telecom Networks," Review of Network Economics, De Gruyter, vol. 6(3), pages 1-25, September.
    3. Robert C. Merton, 2005. "Theory of rational option pricing," World Scientific Book Chapters, in: Sudipto Bhattacharya & George M Constantinides (ed.), Theory Of Valuation, chapter 8, pages 229-288, World Scientific Publishing Co. Pte. Ltd..
    4. Hausman, Jerry & Myers, Stewart, 2002. "Regulating the United States Railroads: The Effects of Sunk Costs and Asymmetric Risk," Journal of Regulatory Economics, Springer, vol. 22(3), pages 287-310, November.
    5. Pereiro, Luis E., 2001. "The valuation of closely-held companies in Latin America," Emerging Markets Review, Elsevier, vol. 2(4), pages 330-370, December.
    6. Camacho, Fernando & Bragança, Gabriel & Rocha, Katia, 2005. "A remuneração de capital nas telecomunicações e o novo contexto regulatório brasileiro [The remuneration of capital in the telecommunications and the new Brazilian regulatory context]," MPRA Paper 5399, University Library of Munich, Germany.
    7. Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, March.
    8. Robert S. Pindyck, 2005. "Pricing Capital Under Mandatory Unbundling and Facilities Sharing," NBER Working Papers 11225, National Bureau of Economic Research, Inc.
    9. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
    10. Black, Fischer & Scholes, Myron S, 1973. "The Pricing of Options and Corporate Liabilities," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 637-654, May-June.
    11. Camacho, Fernando, 2004. "Custo de capital de indústrias reguladas no Brasil [Cost of capital of regulated industries in Brazil]," MPRA Paper 5396, University Library of Munich, Germany.
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    Cited by:

    1. de Braganca, Gabriel Fiuza & Rocha, Katia & Moreira, Rafael Henrique Rodrigues, 2008. "Real Options and the Regulation of Brazilian Fixed-Line Telephone Operators: The Mark-up on the Cost of Capital," Working Paper Series 3997, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    2. de Braganca, Gabriel Fiuza & Rocha, Katia & Moreira, Rafael Henrique Rodrigues, 2008. "Real Options and the Regulation of Brazilian Fixed-Line Telephone Operators: The Mark-up on the Cost of Capital," Working Paper Series 19098, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

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    More about this item

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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