The improvement of Modigliani-Miller model in evaluation of energy companies

The article is about the determination of the cost of the energy enterprises with state block of shares based on an improved Modigliani-Miller model shown on the example of JSC “Electric stations”. This model allows to determine the value of the energy enterprises more accurately, which is very important to control the cost of state-owned shares as the state property. Also improved model can be applied for cyclical reforms to overcome the social problems in the country and create favorable conditions for economic pulse. Finding of a more accurate tool for determining the price of energy enterprises was the aim of this article. The social nature of the electricity tariff in the long-term dynamics of the industry will always lead to the fact that power enterprises in the Kyrgyz Republic, at first sight, will be considered as planned-unprofitable. However, financed by borrowing capital in support of the power system survivability, will increase the cost of utilities assets in accordance with the requirements of technical regulations and support the save production. The improved Modigliani-Miller model will allow to solve this problem through regular revaluation of assets on the basis of indicators which it is possible to break up the action and make their feed to match the real value of assets and capital.