fair rate of return

Definition

Percentage earnings a public utility is allowed to take under the local laws. The objective of such laws is to protect the utility's consumers from extremely high utility charges while covering the utility's needs, such as maintaining and upgrading its equipment, and the need to pay its investors and bond holders an acceptable rate of return.

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Popular 'Accounting' Terms

current ratio
equity
working capital
asset
EBITDA

revenue
net income
negotiable
net profit
net worth

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