This note provides the proof of proposition 5 in our paper titled "Dynamics of Rate-of-Return Regulation."

Under Rate-of-Return regulation, a firm's product prices are constrained by the requirement that investors do not earn more an allowable return on the firm's assets. This paper examines the dynamic properties of the Rate-of-Return regulation process when the regulated firm periodically...

It is common practice for firms in a variety of industries to specify bonus pools that are available for distribution among a group of managers. While the actual size of the bonus pool may vary with the realization of certain financial metrics, for example, earnings growth or...