AER - Equity beta issues paper - Rate of return guideline - October 2013

Equity beta

On 11 October 2013, the AER released an issues paper on equity beta as part of its consultation for developing the rate of return guideline.

The equity beta is an important component of the rate of return. This issues paper sets out our proposed approach to estimating the equity beta. Applying this approach, we propose to adopt an equity beta of 0.7, chosen from within a range of 0.4 to 0.7. In previous decisions, since our 2009 weighted average cost of capital (WACC) review, we have adopted an equity beta of 0.8.

Links to the key consultant reports referred to in this issues paper can be found within the paper. We have previously published these reports on our website.