Average
pre-tax returns on equity declined again for a fourth straight year, to 7.0 percent in 2018.
Also, though the risks of implementation are likely higher, another alternative would be to set rates based on
pre-tax returns that implicitly account for a reasonable tax burden.
These schemes have provided 2.75 percent to 3.00 percent higher
pre-tax returns, on an annualized basis, than savings accounts," said Karthik Srinivasan, senior vice president and group head - Financial Sector Ratings, ICRA Limited.
The Court stopped short of ordering FERC to adopt a specific policy modification and instead ordered FERC to (i) demonstrate that the income tax allowance does not permit partnership pipelines to "double recover" taxes, (ii) remove any duplicative tax recovery for partnership pipelines by adjusting the discounted cash flow return on equity, or (iii) eliminate income tax allowances and set rates based on
pre-tax returns alone.
The report illustrates historical and projected
pre-tax returns on equity (ROE) by business line.
While earnings were still excellent with overall double digit
pre-tax returns on revenue and operating ratios at 80 or below, the number of companies in the MPL sector reporting pre-policyholders' dividend underwriting losses is increasing.
But such strategies could theoretically come at a cost: Funds seeking to avoid tax burdens might constrain their investment opportunities and thus potentially reduce their
pre-tax returns.
After-tax returns can give a materially different view of the real value that managers deliver to clients and the ranking of these managers, compared to assessments made using
pre-tax returns.
Useful for comparing
pre-tax returns of firms with different capital structures EBT 1.
Investors can also consider NCDs issued by companies that offer
pre-tax returns of up to 11.5%, experts said.
Knowing this distinction will prove essential in realizing the potential high
pre-tax returns available in the secondary mortgage market.