There Have Been a Number of States in the United

question 38

Essay

There have been a number of states in the United States deregulating the generation of electricity. Using your understanding of monopolies, discuss the likely effect of deregulation on prices in the industry.

---

Definitions:

Flexible Accounting Rules

This refers to accounting principles that allow for some degree of judgement or choice in how financial transactions are recorded and reported, providing flexibility in financial reporting.

Earnings Management

The practice of using accounting techniques to produce financial reports that present an overly positive view of a company's business activities and financial position.

Dividend Discount Models

Methods used to value a company's stock by discounting predicted dividends to present value.

P/E Ratios

Price-to-Earnings Ratio, a valuation metric comparing the current share price of a company to its per-share earnings.