Monthly Bond Yields
A-Rated Utility Bonds: 1970-1998
30-Yr. Treasury Bonds: 1977-1998
Source:Federal Reserve Board of Governors.
A-Rated
Utility
Year Qtr %Yield
1970 01 9.24
1970 02 9.01
1970 03 8.90
1970 04 9.01
1970 05 9.33
1970 06 9.50
1970 07 9.42
1970 08 9.35
1970 09 9.39
1970 10 9.20
1970 11 9.04
1970 12 8.63
1971 01 8.06
1971 02 7.68
1971 03 7.91
1971 04 7.87
1971 05 8.31
1971 06 8.33
1971 07 8.50
1971 08 8.24
1971 09 7.94
1971 10 7.96
1971 11 7.77
1971 12 7.54
1972 01 7.44
1972 02 7.49
1972 03 7.57
1972 04 7.63
1972 05 7.67
1972 06 7.58
1972 07 7.54
1972 08 7.58
1972 09 7.62
1972 10 7.66
1972 11 7.41
1972 12 7.44
1973 01 7.57
1973 02 7.62
1973 03 7.74
1973 04 7.67
1973 05 7.65
1973 06 7.82
1973 07 8.20
1973 08 8.67
1973 09 8.41
1973 10 8.24
1973 11 8.24
1973 12 8.34
1974 01 8.57
1974 02 8.58
1974 03 8.89
1974 04 9.29
1974 05 9.53
1974 06 10.25
1974 07 11.29
1974 08 11.44
1974 09 11.04
1974 10 11.43
1974 11 10.21
1974 12 10.76
1975 01 10.45
1975 02 10.19
1975 03 10.35
1975 04 10.90
1975 05 10.95
1975 06 10.62
1975 07 10.57
1975 08 10.74
1975 09 10.97
1975 10 10.63
1975 11 10.21
1975 12 10.21
1976 01 9.69
1976 02 9.48
1976 03 9.21
1976 04 8.97
1976 05 9.27
1976 06 9.33
1976 07 9.25
1976 08 9.10
1976 09 8.88
1976 10 8.69
1976 11 8.58
1976 12 8.41 US Treas.
1977 01 8.59 % Yield
1977 02 8.54 7.75
1977 03 8.59 7.80
1977 04 8.55 7.73
1977 05 8.74 7.80
1977 06 8.62 7.64
1977 07 8.52 7.64
1977 08 8.40 7.68
1977 09 8.37 7.64
1977 10 8.54 7.77
1977 11 8.57 7.85
1977 12 8.73 7.94
1978 01 9.00 8.18
1978 02 9.02 8.25
1978 03 8.92 8.23
1978 04 9.10 8.34
1978 05 9.43 8.43
1978 06 9.57 8.50
1978 07 9.73 8.65
1978 08 9.31 8.47
1978 09 9.16 8.47
1978 10 9.48 8.67
1978 11 9.72 8.75
1978 12 9.84 8.88
1979 01 9.98 8.94
1979 02 10.06 9.00
1979 03 10.27 9.03
1979 04 10.24 9.08
1979 05 10.54 9.19
1979 06 10.00 8.92
1979 07 10.03 8.93
1979 08 9.94 8.98
1979 09 10.47 9.17
1979 10 11.56 9.85
1979 11 12.46 10.30
1979 12 12.45 10.12
1980 01 12.82 10.60
1980 02 14.35 12.13
1980 03 15.03 12.34
1980 04 14.29 11.40
1980 05 12.64 10.36
1980 06 11.99 9.81
1980 07 12.41 10.24
1980 08 13.56 11.00
1980 09 13.72 11.34
1980 10 14.18 11.59
1980 11 15.04 12.37
1980 12 15.64 12.40
1981 01 15.17 12.14
1981 02 15.95 12.80
1981 03 15.41 12.69
1981 04 16.48 13.20
1981 05 16.48 13.60
1981 06 15.94 12.96
1981 07 16.86 13.59
1981 08 17.69 14.17
1981 09 18.33 14.67
1981 10 18.24 14.68
1981 11 16.62 13.35
1981 12 16.44 13.45
1982 01 17.09 14.22
1982 02 17.23 14.22
1982 03 16.67 13.53
1982 04 16.62 13.37
1982 05 16.23 13.24
1982 06 16.72 13.92
1982 07 16.45 13.55
1982 08 15.49 12.77
1982 09 14.53 12.07
1982 10 13.29 11.17
1982 11 12.79 10.54
1982 12 12.99 10.54
1983 01 12.74 10.63
1983 02 12.90 10.88
1983 03 12.47 10.63
1983 04 12.04 10.48
1983 05 11.92 10.53
1983 06 12.40 10.93
1983 07 12.79 11.40
1983 08 13.16 11.82
1983 09 12.98 11.63
1983 10 12.89 11.58
1983 11 13.14 11.75
1983 12 13.29 11.88
1984 01 12.99 11.75
1984 02 13.05 11.95
1984 03 13.63 12.38
1984 04 13.96 12.65
1984 05 14.79 13.43
1984 06 15.00 13.44
1984 07 14.93 13.21
1984 08 14.12 12.54
1984 09 13.86 12.29
1984 10 13.52 11.98
1984 11 12.98 11.56
1984 12 12.88 11.52
1985 01 12.78 11.45
1985 02 12.76 11.47
1985 03 13.17 11.81
1985 04 12.75 11.47
1985 05 12.25 11.05
1985 06 11.62 10.45
1985 07 11.60 10.50
1985 08 11.77 10.56
1985 09 11.87 10.61
1985 10 11.82 10.50
1985 11 11.38 10.06
1985 12 10.91 9.54
1986 01 10.74 9.40
1986 02 10.20 8.93
1986 03 9.41 7.96
1986 04 9.26 7.39
1986 05 9.50 7.52
1986 06 9.65 7.57
1986 07 9.56 7.27
1986 08 9.51 7.33
1986 09 9.57 7.62
1986 10 9.48 7.70
1986 11 9.31 7.52
1986 12 9.08 7.37
1987 01 8.92 7.39
1987 02 8.82 7.54
1987 03 8.84 7.55
1987 04 9.51 8.25
1987 05 10.05 8.78
1987 06 10.05 8.57
1987 07 10.17 8.64
1987 08 10.37 8.97
1987 09 10.84 9.59
1987 10 11.07 9.61
1987 11 10.39 8.95
1987 12 10.42 9.12
1988 01 10.05 8.83
1988 02 9.75 8.43
1988 03 9.91 8.63
1988 04 10.23 8.95
1988 05 10.61 9.23
1988 06 10.41 9.00
1988 07 10.40 9.14
1988 08 10.45 9.32
1988 09 10.26 9.06
1988 10 10.11 8.89
1988 11 10.12 9.02
1988 12 10.08 9.01
1989 01 10.09 8.93
1989 02 10.25 9.01
1989 03 10.37 9.17
1989 04 10.33 9.03
1989 05 10.09 8.83
1989 06 9.65 8.27
1989 07 9.54 8.08
1989 08 9.55 8.12
1989 09 9.55 8.15
1989 10 9.39 8.00
1989 11 9.28 7.90
1989 12 9.36 7.90
1990 01 9.63 8.26
1990 02 9.84 8.50
1990 03 9.92 8.56
1990 04 10.09 8.76
1990 05 10.04 8.73
1990 06 9.85 8.46
1990 07 9.96 8.50
1990 08 10.29 8.86
1990 09 10.28 9.03
1990 10 10.23 8.86
1990 11 10.07 8.54
1990 12 9.95 8.24
1991 01 9.83 8.27
1991 02 9.54 8.03
1991 03 9.58 8.29
1991 04 9.46 8.21
1991 05 9.45 8.27
1991 06 9.53 8.47
1991 07 9.55 8.45
1991 08 9.25 8.14
1991 09 9.05 7.95
1991 10 9.02 7.93
1991 11 8.95 7.92
1991 12 8.68 7.70
1992 01 8.57 7.58
1992 02 8.79 7.85
1992 03 8.91 7.97
1992 04 8.82 7.96
1992 05 8.70 7.89
1992 06 8.62 7.84
1992 07 8.38 7.60
1992 08 8.16 7.39
1992 09 8.11 7.34
1992 10 8.40 7.53
1992 11 8.51 7.61
1992 12 8.27 7.44
1993 01 8.13 7.34
1993 02 7.80 7.09
1993 03 7.61 6.82
1993 04 7.66 6.85
1993 05 7.75 6.92
1993 06 7.59 6.81
1993 07 7.43 6.63
1993 08 7.16 6.32
1993 09 6.94 6.00
1993 10 6.91 5.94
1993 11 7.25 6.21
1993 12 7.28 6.25
1994 01 7.24 6.29
1994 02 7.45 6.49
1994 03 7.82 6.91
1994 04 8.20 7.27
1994 05 8.37 7.41
1994 06 8.30 7.40
1994 07 8.45 7.58
1994 08 8.36 7.49
1994 09 8.62 7.71
1994 10 8.80 7.94
1994 11 8.95 8.08
1994 12 8.78 7.87
1995 01 8.75 7.85
1995 02 8.55 7.61
1995 03 8.40 7.45
1995 04 8.31 7.36
1995 05 7.89 6.95
1995 06 7.60 6.57
1995 07 7.72 6.72
1995 08 7.84 6.86
1995 09 7.55 6.55
1995 10 7.36 6.37
1995 11 7.30 6.26
1995 12 7.10 6.06
1996 01 7.09 6.05
1996 02 7.31 6.24
1996 03 7.75 6.60
1996 04 7.90 6.79
1996 05 8.02 6.93
1996 06 8.13 7.06
1996 07 8.07 7.03
1996 08 7.87 6.84
1996 09 8.06 7.03
1996 10 7.83 6.81
1996 11 7.54 6.48
1996 12 7.63 6.55
1997 01 7.93 6.83
1997 02 7.81 6.69
1997 03 8.08 6.93
1997 04 8.23 7.09
1997 05 8.01 6.94
1997 06 7.85 6.77
1997 07 7.62 6.51
1997 08 7.67 6.58
1997 09 7.58 6.50
1997 10 7.44 6.33
1997 11 7.24 6.11
1997 12 7.10 5.99
1998 01 6.97 5.81
1998 02 7.02 5.89
1998 03 7.11 5.95
1998 04 7.10 5.92
1998 05 7.16 5.93
1998 06 6.98 5.70
1998 07 6.93 5.68
1998 08 7.02 5.54
1998 09 6.94 5.20
Description  |
|---|
| Shortcomings |
|---|
Risk Premium Cost of Equity
Indicative Simple Risk Premium Cost Of Equity
| 30-Year US Treasury Bond Rate (9/30/98) | 5.20% |
|---|
| Risk Premium Between US Treas. & A-Rated Utility Debt | 1.74% |
|---|
| Current Yield On A-Rated Utility Debt | 6.94% |
|---|
| Equity Risk Premium* | 3.19% |
|---|
| Risk Premium Cost of Equity | 10.13% |
|---|
*Based on risk premium calculated in FERC Docket ER93-465-000, see Schedule 2, p. 4 of 8 (EXCEL file).
Indicative CAPM Risk Premium Cost Of Equity
| Rf : 30-Year US Treasury Bond Rate (9/30/98) | 5.20% |
|---|
| Typical Electric Utility Beta (1) | .70 |
|---|
| MP: Historical Market Premium(2) | 7.20% |
|---|
| CAPM Risk Premium Cost of Equity | 10.24% |
|---|
(1) Recent Value Line Beta for FPL Group
(2) From FERC Docket ER93-465-000 based upon 65 years of data from Ibbotson.
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