 another area where you can use capital asset pricing model is the regulation and the cost plus pricing so regulators who have to assess the prices of utilities for example the value of electricity how much charge or price will be the charge for electricity utility how much charge or price will be the charge for electricity utility how much charge or price will be the charge for electricity utility so that the stakeholders who generate money from the utility provisions they also have to be affected and the consumers who are using the utility they also have to not have to pay much price for it so the regulators try to assess a fair price and to assess that fair price they take support of capital asset pricing model now for example suppose we thought that there is a commission who regulates the value of electricity and for that they have to calculate a fair price so that the customers can charge for electricity or to regulate it they should be aware that this is a price on which there is a fair price so what will the commission do? the commission will assess the cost of producing the electricity and with the help of capital asset pricing model they can calculate the fair rate of return and accordingly they can define the regulation that the price of electricity per unit should not be above or below this particular value