| Other than the problematic discounted cash flow and capital assetpricing models that have been used for decades, no other assetpricing models have generally been adopted for estimating thecost of common equity capital. A recently developed and promis-ing general consumption asset pricing model for estimating costsof common equity is successful in empirical tests and applied forestimating the cost of common equity. This research presents anempirical investigation of the model for application to the regu-lation of public utilities and stock market and compares the costof capital results with the CAPM. The model is applicable for esti-mating the cost of common equity capital for any stock. The paperrecommends that the GCAPM be considered as an additional assetmodel with the others that are typically used as additional infor-mation in estimating the cost of common equity capital. |