Valuation of Public Service Corporations; Legal And Economic Phases of Valuation for Rate Making And Public Purchase

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& T. Co. Com. L. 244, Febru- ary 4, 1913.
§ 1216] Discount on Bonds 1087 person were proposing to purchase the present plant, this item of cost of capital would form no part of the basis of the offer.
§ 1216. Wisconsin Commission.
The case of City of Milwaukee v. The Milwaukee Electric Railway and Light Company^ involves the valuation of a street railway for rate purposes by the Wisconsin Railroad Commission. The Commission issued an order slightly reducing the existing rates of charge.
The Com
...mission holds that under certain circumstances a discount on bonds should undoubtedly be included as a portion of the intangible value of the property. Whether or not the discount is to be included as a portion of the property account will depend upon the interest rate allowed by the Commission. In the present case the Commission holds that its. allowance of a rate of return of about 7^/^ per cent, covering both interest and profits, is ample to allow for all expenses of sale, including any dis- count on the securities issued.

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