Offering thorough and defensible quantitative analyses, sophisticated economic modeling, sound financial and economic theory, and comprehensive research backed by years of experience.
We provide expert testimony, support in tariff and regulatory proceedings, contract dispute opinions, calculations of damages and compensation, regulatory agency business plans, network model development, and market demand, tariff, pricing, cost, diligence and feasibility studies.
Corporate and International Finance
Our team at Solutions Economics has vast experience providing services in Corporate and International Finance. We have provided consulting and litigation services on a wide variety of topics such as valuation, cost of capital, due diligence, mergers and acquisitions, complex damages, and economic and statistics studies, both in domestic and international markets. We enhance our provision of services by teaming up with academics and certified public accountants affiliated with our firm. Dr. Leonardo Giacchino, along with Dr. Jonathan Lesser of Continental Economics, is the author of Principles of Utility Corporate Finance.
Our experts have worked in infrastructure business development and combine their first hand industry experience with economic theory, using economic and finance modeling techniques, accounting principles, econometric analyses and statistical tools in the estimation of the value of assets in competitive and regulatory markets. We have experience using all valuation methods by either developing financial models (or auditing and/or modifying existing models) or providing model inputs when requested. We are successful in communicating valuation results because we use plain language for the nonfinancial audience.
Our experts have provided sound advice in the process of due diligence for investors by pointing out the relevant regulatory issues that could potentially affect an asset’s value. They have provided opinion reports on transactions totaling over a billion dollars.
Our experts have worked in different industries and have been involved with different kind of contracts. They identify risks and liabilities, assess prospects and calculate a value for instruments such as supply energy contracts, power purchase agreements, transportation contracts, concession contracts, certified emission reduction purchase agreements, futures and derivatives.
We have built a large variety of financial models suited to the specific needs of each client. We have developed detailed models with easy-to-use menus of options for sensitivity analysis of multi-stage valuations.
We also provide independent model review services, ranging from a check for material errors to a full opinion report including inputs and assumptions. We also enhance existing models incorporating additional functionalities and approaches.
Rate of Return
Whether a rate of return is needed for financial modeling purposes or in rate case, our experts estimate a firm’s rate of return based on the concept of “opportunity” cost. Whenever investors make their funds available to a firm, regulated or not, they forego opportunities to use those funds elsewhere and put their funds at risk. Regulated firms must be able to compensate their investors adequately for forgoing those opportunities and taking on financial risk, and thus be able to earn a fair rate of return. Our economists estimate the fair rate of return using numerous financial models that account for historic market performance, future financial trends, and the firm’s capital structure. In developing countries, our economists also develop specific “country risk” premiums based on the robustness of financial markets in those countries.
We also specialize in the developing of regulatory accounting for the purposes of providing information to regulators. Regulatory accounting is a comprehensive set of rules and regulations for accounting in regulated industries to monitor the industry and help determine whether a regulated firm’s costs are just and reasonable and known and measurable. Regulatory accounting relies on the same underlying data as financial accounting, but it applies different sets of rules to develop and present information in ways that are useful and appropriate to the rate-setting process. Our experts have successfully developed regulatory accounting systems in five different countries for four different industries.
We provide independent and objective financial and economic support to investors in market transactions. We understand very well how markets work and provide sound financial advice based on our understanding of the regulatory, economic and business environment.