The empirical results show that while the CAPM systematically underestimates the cost of equity, the proposed models correctly estimate its expected value; furthermore, they show a slight improvement also in terms of estimates' volatility. Due to their efficacy and ease of use, the proposed models...
aForecasting WACC also requires estimating the cost of equity. There may different approaches to this task, and will result in a range of estimates. 展望WACC也要求估计产权的费用。 那里可以不同的方法到这项任务和导致估计的范围。[translate]
First, is the distribution during the holding period, and second is the capital gain or loss in the value of the investment. Furthermore, this chapter also discusses the Capital Asset Pricing Model (CAPM), the most widely used method for estimating the cost of equity capital....
equity risk-premiacost of equityCAPMbond-plus risk-premiumThis article proposes an alternative approach to estimating the required rate of return on equity, combining the bond-plus risk-premium approach and the CapitalSocial Science Electronic Publishing...
ESTIMATING THE COST OF EQUITY IN ABNORMAL TIMES LESSONS LEARNED FROM GREECEI. INTRODUCTIONThe estimation of cost of capital is the first necessary step for the capital providers to evaluate any investment decision within the enterprise (or an investment plant within the examined industry). The cost...
This paper estimates the cost of equity capital for Property/Casualty insurers by applying three alternative asset pricing models: the Capital Asset Pricing Model (CAPM), the Arbitrage Pricing Theory (APT), and a unified CAPM/APT model (Wei (1988)∥. The in-sample forecast ability of the mode...
CAPM for estimating the cost of equity capital: Interpreting the empirical evidence We argue that the empirical evidence against the capital asset pricing model (CAPM) based on stock returns does not invalidate its use for estimating the c... Z Da,RJ Guo,R Jagannathan - 《Journal of Financial...
Jeffery Marian, an analyst with Arlington Machinery, is estimating a country risk premium to include in his estimate of the cost of equity for a project Arlington is starting in India. Marian has compiled the following information for his analysis: Indian 10-year government bond yield=7.20%. ...
This thesis examines the relationship between systematic risk and accounting variables for non-traded transportation companies and provides an applicable CAPM framework for estimating the cost of equity capital. I extend previous research by assessing the risk relevance of accounting measures in an internat...
allowing that the CAPM is the "wrong" model. The analyst is assumed to rely on a standard market index. We find that the great majority of the error in estimating the cost of equity capital is found in the risk premium estimate, and relatively small errors are due to the risk measure,...