A Comparison Of Cost Of Equity Estimates Of Local And Global Capm

Download A Comparison Of Cost Of Equity Estimates Of Local And Global Capm full books in PDF, epub, and Kindle. Read online A Comparison Of Cost Of Equity Estimates Of Local And Global Capm ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!

A Comparison of Cost of Equity Estimates of Local and Global CAPM

Author : Cuauhtemoc Villarreal
Publisher :
ISBN 13 :
Total Pages : 1 pages
Book Rating : 4.:/5 (13 download)

DOWNLOAD NOW!

Book Synopsis A Comparison of Cost of Equity Estimates of Local and Global CAPM by : Cuauhtemoc Villarreal

Download or read book A Comparison of Cost of Equity Estimates of Local and Global CAPM written by Cuauhtemoc Villarreal and published by . This book was released on 2014 with total page 1 pages. Available in PDF, EPUB and Kindle. Book excerpt: Given that Mexican companies holding foreign currency debt are extremely exposed to the volatility in currency exchange rates, we ask if the required returns determined by the Local CAPM model and those determined by the Global CAPM model are significantly different. In our study, which was conducted between 2006 and 2010, we found the two models projected significantly different estimated capital costs. We tracked 19 companies that trade on the Mexican Stock Market and found that the average of the Local CAPM is 13.83% while that of the Global CAPM is 20.38%. Our discovery that the estimated cost of capital for the Mexican firms in the global capital market is significantly higher than in the local -- reaching 1000basis points in some cases -- suggests the need for further studies to investigate the statistical and economic significance of this difference.

A Comparison of Cost of Equity Estimates of Local and Global CAPMs

Author : Dev R. Mishra
Publisher :
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.:/5 (129 download)

DOWNLOAD NOW!

Book Synopsis A Comparison of Cost of Equity Estimates of Local and Global CAPMs by : Dev R. Mishra

Download or read book A Comparison of Cost of Equity Estimates of Local and Global CAPMs written by Dev R. Mishra and published by . This book was released on 2017 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: Cost of equity estimates are compared for three pricing models: the traditional local CAPM, the single (market) factor global CAPM, and the two-factor global CAPM, with both market and currency index factors. For 2989 US stocks, the average difference in the cost of equity estimates is about 48 basis points between the local CAPM and the single-factor global CAPM, and is about 61 basis points between the two global models. For 70 developed-market ADRs, the corresponding average differences are 76 and 47 basis points, respectively. For 48 emerging-market ADRs, the corresponding average differences are 57 and 70 basis points.

Foreign Sales and US Firms' Cost of Equity Estimates

Author : Walter Dolde
Publisher :
ISBN 13 :
Total Pages : 40 pages
Book Rating : 4.:/5 (519 download)

DOWNLOAD NOW!

Book Synopsis Foreign Sales and US Firms' Cost of Equity Estimates by : Walter Dolde

Download or read book Foreign Sales and US Firms' Cost of Equity Estimates written by Walter Dolde and published by . This book was released on 2001* with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Foreign Exchange Exposure and Cost of Equity for US Companies

Author : Walter Dolde
Publisher :
ISBN 13 :
Total Pages : 9 pages
Book Rating : 4.:/5 (13 download)

DOWNLOAD NOW!

Book Synopsis Foreign Exchange Exposure and Cost of Equity for US Companies by : Walter Dolde

Download or read book Foreign Exchange Exposure and Cost of Equity for US Companies written by Walter Dolde and published by . This book was released on 2015 with total page 9 pages. Available in PDF, EPUB and Kindle. Book excerpt: For US firms with extreme foreign exchange (FX) exposure levels, we ask whether the single-factor global capital asset pricing model (CAPM) yields significantly different cost of equity estimates from the local CAPM. For a sample of US firms from 2000 to 2007, we find a clear and statistically significant relation between the differences of the two models' cost of equity estimates and the firms' FX exposure estimates. However, the economic significance is questionable, even for US firms with extreme FX exposure levels.

Cost of Capital, + Website

Author : Shannon P. Pratt
Publisher : John Wiley & Sons
ISBN 13 : 1118555805
Total Pages : 1344 pages
Book Rating : 4.1/5 (185 download)

DOWNLOAD NOW!

Book Synopsis Cost of Capital, + Website by : Shannon P. Pratt

Download or read book Cost of Capital, + Website written by Shannon P. Pratt and published by John Wiley & Sons. This book was released on 2014-04-21 with total page 1344 pages. Available in PDF, EPUB and Kindle. Book excerpt: A one-stop shop for background and current thinking on the development and uses of rates of return on capital Completely revised for this highly anticipated fifth edition, Cost of Capital contains expanded materials on estimating the basic building blocks of the cost of equity capital, the risk-free rate, and equity risk premium. There is also discussion of the volatility created by the financial crisis in 2008, the subsequent recession and uncertain recovery, and how those events have fundamentally changed how we need to interpret the inputs to the models we use to develop these estimates. The book includes new case studies providing comprehensive discussion of cost of capital estimates for valuing a business and damages calculations for small and medium-sized businesses, cross-referenced to the chapters covering the theory and data. Addresses equity risk premium and the risk-free rate, including the impact of Federal Reserve actions Explores how to use Morningstar's Ibbotson and Duff Phelps Risk Premium Report data Discusses the global cost of capital estimation, including a new size study of European countries Cost of Capital, Fifth Edition puts an emphasis on practical application. To that end, this updated edition provides readers with exclusive access to a companion website filled with supplementary materials, allowing you to continue to learn in a hands-on fashion long after closing the book.

Cost of Capital

Author : Shannon P. Pratt
Publisher : John Wiley & Sons
ISBN 13 : 9780470223710
Total Pages : 448 pages
Book Rating : 4.2/5 (237 download)

DOWNLOAD NOW!

Book Synopsis Cost of Capital by : Shannon P. Pratt

Download or read book Cost of Capital written by Shannon P. Pratt and published by John Wiley & Sons. This book was released on 2008-02-25 with total page 448 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this long-awaited Third Edition of Cost of Capital: Applications and Examples, renowned valuation experts and authors Shannon Pratt and Roger Grabowski address the most controversial issues and problems in estimating the cost of capital. This authoritative book makes a timely and significant contribution to the business valuation body of knowledge and is an essential part of the expert's library.

Valuation

Author : McKinsey & Company Inc.
Publisher : John Wiley & Sons
ISBN 13 : 1119610923
Total Pages : 896 pages
Book Rating : 4.1/5 (196 download)

DOWNLOAD NOW!

Book Synopsis Valuation by : McKinsey & Company Inc.

Download or read book Valuation written by McKinsey & Company Inc. and published by John Wiley & Sons. This book was released on 2020-05-21 with total page 896 pages. Available in PDF, EPUB and Kindle. Book excerpt: McKinsey & Company's #1 best-selling guide to corporate valuation—the fully updated seventh edition Valuation has been the foremost resource for measuring company value for nearly three decades. Now in its seventh edition, this acclaimed volume continues to help financial professionals around the world gain a deep understanding of valuation and help their companies create, manage, and maximize economic value for their shareholders. This latest edition has been carefully revised and updated throughout, and includes new insights on topics such as digital, ESG (environmental, social and governance), and long-term investing, as well as fresh case studies. Clear, accessible chapters cover the fundamental principles of value creation, analyzing and forecasting performance, capital structure and dividends, valuing high-growth companies, and much more. The Financial Times calls the book “one of the practitioners’ best guides to valuation.” This book: Provides complete, detailed guidance on every crucial aspect of corporate valuation Explains the strategies, techniques, and nuances of valuation every manager needs to know Covers both core and advanced valuation techniques and management strategies Features/Includes a companion website that covers key issues in valuation, including videos, discussions of trending topics, and real-world valuation examples from the capital markets For over 90 years, McKinsey & Company has helped corporations and organizations make substantial and lasting improvements in their performance. Through seven editions and 30 years, Valuation: Measuring and Managing the Value of Companies, has served as the definitive reference for finance professionals, including investment bankers, financial analysts, CFOs and corporate managers, venture capitalists, and students and instructors in all areas of finance.

Cross-border Valuation

Author : Gordon M. Bodnar
Publisher :
ISBN 13 :
Total Pages : 74 pages
Book Rating : 4.:/5 (318 download)

DOWNLOAD NOW!

Book Synopsis Cross-border Valuation by : Gordon M. Bodnar

Download or read book Cross-border Valuation written by Gordon M. Bodnar and published by . This book was released on 2003 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: "How does a firm in one country evaluate an investment in a firm in another country, or how does it evaluate a foreign project that the firm itself is undertaking? The firm must estimate future free cash flows just as in a domestic project, but choosing an appropriate discount rate is a particular challenge. This study examines the determinants of the discount rate for an international acquisition or project by examining the sources of risk in an international setting. These risks include stock-market price risk measured with various versions of the capital asset pricing model, as well as exchange rate risk and political risk. To measure stock market risk, both segmented and integrated models of the world equity markets are considered. The emphasis of the study is on some of the practical aspects of estimation, particular for markets where no comparable investments exist on which to base estimates of risk premiums. To show how each of these risks might be measured, the study reports estimates for a representative French firm, Thals. The estimates range widely depending on whether or not the equity market is globally integrated"--NBER website

Valuation + DCF Model Download

Author : McKinsey & Company Inc.
Publisher : John Wiley & Sons
ISBN 13 : 1118873688
Total Pages : 852 pages
Book Rating : 4.1/5 (188 download)

DOWNLOAD NOW!

Book Synopsis Valuation + DCF Model Download by : McKinsey & Company Inc.

Download or read book Valuation + DCF Model Download written by McKinsey & Company Inc. and published by John Wiley & Sons. This book was released on 2015-08-17 with total page 852 pages. Available in PDF, EPUB and Kindle. Book excerpt: McKinsey & Company's #1 best-selling guide to corporate valuation, now in its sixth edition Valuation is the single best guide of its kind, helping financial professionals worldwide excel at measuring, managing, and maximizing shareholder and company value. This new sixth edition provides insights on the strategic advantages of value-based management, complete detailed instruction, and nuances managers should know about valuation and valuation techniques as applied to different industries, emerging markets, and other special situations. The accompanying DCF model download allows you to complete computations automatically for error-free analysis and valuation of real companies. The model ensures that all important measures, such as return on investment capital and free cash flow are calculated correctly, so you can focus on the company's performance rather than computational errors. Valuation lies at the crossroads of corporate strategy and finance. In today's economy, it has become an essential role—and one that requires excellence at all points. This guide shows you everything you need to know, and gives you the understanding you need to be effective. Estimate the value of business strategies to drive better decision making Understand which business units a corporate parent is best positioned to own Assess major transactions, including acquisitions, divestitures, and restructurings Design a capital structure that supports strategy and minimizes risk As the valuation function becomes ever more central to long- and short-term strategy, analysts and managers need an authoritative reference to turn to for answers to challenging situations. Valuation stands ahead of the field for its reputation, quality, and prestige, putting the solutions you need right at your fingertips.

Estimating beta and Cost of Equity Capital for Non-traded Transportation Companies

Author : Sascha Heller
Publisher : diplom.de
ISBN 13 : 3842812809
Total Pages : 71 pages
Book Rating : 4.8/5 (428 download)

DOWNLOAD NOW!

Book Synopsis Estimating beta and Cost of Equity Capital for Non-traded Transportation Companies by : Sascha Heller

Download or read book Estimating beta and Cost of Equity Capital for Non-traded Transportation Companies written by Sascha Heller and published by diplom.de. This book was released on 2014-04-11 with total page 71 pages. Available in PDF, EPUB and Kindle. Book excerpt: Inhaltsangabe:Introduction: Estimating the cost of equity capital has two major implications. First, it reflects the return to a company s stock which an equity investor expects to receive from his investment. He makes his decision upon whether he could earn a higher rate of return in an alternative investment of equivalent risk. Second, a company must earn the cost of capital (both debt and equity) through its undertaken projects. It is hence relevant for decisions on undertaking positive net present value projects which are of similar risk as the company s average business activities. It also substantially influences the pricing of an entire firm as far as the valuation is based on a discounted cash flow model. A lot of effort has been done in the past to achieve accurate models which precisely determine this cost. Building on the modern portfolio theory of Harry Markowitz, a widely used and commonly known model in this context is the Capital Asset Pricing Model (CAPM). Introduced by several researchers in the 1960s, it is still one of the most applied methods for practitioners. However, it suffers from several shortcomings, including statistical caveats, economic assumptions, the absence of market frictions and the behaviour of market participants. An upgrade to this model was provided by Stephen Ross which has resulted in the Arbitrage Pricing Theory (APT). It combines several risk factors in addition to one market proxy, as it is the case in the CAPM, and is less restrictive in its assumptions. But both CAPM and APT require observable market data, i.e. stock prices, of the analysed companies. These models thus only work for publicly listed firms. If research should be done on non-traded companies, however, an alternative methodology must be applied. In general, data from the balance sheet, the income statement and the cash flow statement are available for both listed and non-listed companies. While accounting data have widely been used in the past as well and have been assumed to provide valuable information in explaining stock returns, this line of research has dissipated over time. Only a few key figures, such as size and financial leverage, are still considered to be relevant. However, they can be used to indirectly estimate a firm s beta by assessing their explanatory power in a CAPM or APT framework. This methodology is particularly beneficial for firms which are not listed because there cannot be observed any stock price movements. [...]

Applied International Finance

Author : Thomas J. O'Brien
Publisher : Business Expert Press
ISBN 13 : 1606497359
Total Pages : 183 pages
Book Rating : 4.6/5 (64 download)

DOWNLOAD NOW!

Book Synopsis Applied International Finance by : Thomas J. O'Brien

Download or read book Applied International Finance written by Thomas J. O'Brien and published by Business Expert Press. This book was released on 2013-11-30 with total page 183 pages. Available in PDF, EPUB and Kindle. Book excerpt: This text is designed for use in a course in an applied international corporate finance for managers and executives. Instead of the encyclopedic approach, the text focuses on the two main issues of interest to managers who deal with overseas operations. The first main issue is how uncertain foreign exchange (FX) rate changes affect a firm's ongoing cash flows and equity value, and what can be done about that risk. The second main issue is the estimation of the cost of capital for international operations and the evaluation of overseas investment proposals. Numerous examples of real world companies are used.

Market Structure and the Cost of Capital

Author : Mohamed El Hedi Arouri
Publisher :
ISBN 13 :
Total Pages : 25 pages
Book Rating : 4.:/5 (827 download)

DOWNLOAD NOW!

Book Synopsis Market Structure and the Cost of Capital by : Mohamed El Hedi Arouri

Download or read book Market Structure and the Cost of Capital written by Mohamed El Hedi Arouri and published by . This book was released on 2013 with total page 25 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Applied International Finance II, Second Edition

Author : Thomas J. O'Brien
Publisher : Business Expert Press
ISBN 13 : 1631579231
Total Pages : 125 pages
Book Rating : 4.6/5 (315 download)

DOWNLOAD NOW!

Book Synopsis Applied International Finance II, Second Edition by : Thomas J. O'Brien

Download or read book Applied International Finance II, Second Edition written by Thomas J. O'Brien and published by Business Expert Press. This book was released on 2017-08-16 with total page 125 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume is the second of a three-volume set designed for use in a course in applied international corporate finance for managers and executives. This volume’s issue is how uncertain foreign exchange (FX) rate changes affect a firm’s ongoing cash flows and equity value, and what can be done in terms of hedging this risk using financial instruments. The accounting implications are also considered. Numerous examples of real-world companies are used. The volume contains a hypothetical case that ties the material together. The first volume reviews some basics of FX rates: Introduction to Foreign Exchange Rates, 2nd edition, Business Expert Press, 2016. The third volume deals with the estimation of the cost of capital for international operations and the evaluation of overseas investment proposals: Applied International Finance II: International Cost of Capital and Capital Budgeting, 2nd edition, Business Expert Press, 2017.

The World We Live in

Author : Jenke ter Horst
Publisher :
ISBN 13 :
Total Pages : 31 pages
Book Rating : 4.:/5 (16 download)

DOWNLOAD NOW!

Book Synopsis The World We Live in by : Jenke ter Horst

Download or read book The World We Live in written by Jenke ter Horst and published by . This book was released on 2017 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we document economically and statistically large differences in the cost of equity by comparing an international CAPM to a domestic CAPM. We consider fifteen countries over a nearly twenty-year period (1996 -2015). While the application of the international version of the CAPM in cases where an international market index is used as a pricing factor would seem justified by increased capital market integration, the empirical evidence on this has been inconclusive to date. We found that the average difference in the cost of equity between the models was equal to 0.77%, which represents about 20% of the historical risk premium. Moreover, for almost 20% of the companies, this difference in cost of equity is also statistically significant. For these companies the difference in cost of equity is equal to 1.49%. We therefore conclude that the ICAPM is increasingly becoming the relevant model for cost of equity calculations.

Cross-Border Valuation

Author : Gordon M. Bodnar
Publisher :
ISBN 13 :
Total Pages : 53 pages
Book Rating : 4.:/5 (129 download)

DOWNLOAD NOW!

Book Synopsis Cross-Border Valuation by : Gordon M. Bodnar

Download or read book Cross-Border Valuation written by Gordon M. Bodnar and published by . This book was released on 2010 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: How does a firm in one country evaluate an investment in a firm in another country, or how does it evaluate a foreign project that the firm itself is undertaking? The firm must estimate future free cash flows just as in a domestic project, but choosing an appropriate discount rate is a particular challenge. This study examines the determinants of the discount rate for an international acquisition or project by examining the sources of risk in an international setting. These risks include stock-market price risk measured with various versions of the capital asset pricing model, as well as exchange rate risk and political risk. To measure stock market risk, both segmented and integrated models of the world equity markets are considered. The emphasis of the study is on some of the practical aspects of estimation, particular for markets where no comparable investments exist on which to base estimates of risk premiums. To show how each of these risks might be measured, the study reports estimates for a representative French firm, Thals. The estimates range widely depending on whether or not the equity market is globally integrated.

Estimating Cost of Equity

Author :
Publisher :
ISBN 13 :
Total Pages : 68 pages
Book Rating : 4.:/5 (764 download)

DOWNLOAD NOW!

Book Synopsis Estimating Cost of Equity by :

Download or read book Estimating Cost of Equity written by and published by . This book was released on 2000 with total page 68 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Cost of equity in emerging markets: a comparative analysis with argentinean, brazilian, chilean and mexican companies

Author :
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (181 download)

DOWNLOAD NOW!

Book Synopsis Cost of equity in emerging markets: a comparative analysis with argentinean, brazilian, chilean and mexican companies by :

Download or read book Cost of equity in emerging markets: a comparative analysis with argentinean, brazilian, chilean and mexican companies written by and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: A estimação do custo de capital próprio em mercados emergentes é uma tarefa relevante para diversos grupos: investidores internacionais, investidores locais, administradores e até os reguladores. Diante disso, essa dissertação de mestrado tem, portanto, quatro objetivosprincipais: (i) discutir de maneira crítica os aspectos teóricos dos modelos de avaliação de custo de capital próprio em mercados emergentes existentes na literatura; (ii) apresentar e discutir as principais metodologias existentes para a estimação dos parâmetros dos modelos de avaliação de custo de capital próprio; (iii) realizar uma aplicação comparativa desses modelos nos mercados acionáriosargentino, brasileiro, chileno e mexicano de maneira a avaliar o impacto da escolha de determinado modelo de avaliação de custo de capital próprio sobre as decisõesdos investidores e reguladores; e (iv) avaliar o poder explanatório das medidas de risco dos modelos analisados sobre os retornos futuros. Os resultados obtidos indicaram, de uma maneira geral, que: (i) a escolha de determinado modelo de avaliação de custo de capital próprio por parte do investidor influencia diretamente a tomada de decisões desse investidor, seja sobre a decisão de macro-alocação de recursos entre países ou sobre a escolha do grau de exposição a determinado país; (ii) as medidas de risco do D-CAPM (downside betas) apresentaram um poder explanatório maior sobre os retornos futuros das ações de empresas Argentinas, Brasileiras, Chilenas e Mexicanas analisadas e foram também mais úteis para a construção de portfólios, entretanto, não foi possível identificar uma medida de risco em especial que apresentasse desempenho superiorsimultaneamente em todos os mercados em questão.