Assessing Discount Rate for a Project Financed Entirely with Equity Capital

Assessing Discount Rate for a Project Financed Entirely with Equity Capital

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Estimating discount rate for an investment project is one of the most challenging tasks incapital budgeting. In this paper we discuss different kind of models for cost of equity capital proposed infinance literature (static CAPM, conditional CAPM, APT, build-up model), focusing especially on advanta...

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Main Author: Nicoleta Vintila
Format: Article
Language:English
Published: General Association of Economists from Romania 2007-09-01
Series:Theoretical and Applied Economics
Subjects:
capital budgeting
discount rate
cost of equity capital
risk-return models
build-up models.
Online Access:http://www.ectap.ro/articole/247.pdf
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spelling doaj-951c26e52913416fb668cea27ab2f4ed2020-11-25T00:37:43ZengGeneral Association of Economists from RomaniaTheoretical and Applied Economics1841-86782007-09-019(514)9(514)1120Assessing Discount Rate for a Project Financed Entirely with Equity CapitalNicoleta VintilaEstimating discount rate for an investment project is one of the most challenging tasks incapital budgeting. In this paper we discuss different kind of models for cost of equity capital proposed infinance literature (static CAPM, conditional CAPM, APT, build-up model), focusing especially on advantagesand disadvantages of using each of them. In the final section, we estimate the discount rate fora certain project financed entirely with equity capital, using a version of build-up model.http://www.ectap.ro/articole/247.pdfcapital budgetingdiscount ratecost of equity capitalrisk-return modelsbuild-up models.
collection DOAJ
language English
format Article
sources DOAJ
author Nicoleta Vintila
spellingShingle Nicoleta Vintila
Assessing Discount Rate for a Project Financed Entirely with Equity Capital
Theoretical and Applied Economics
capital budgeting
discount rate
cost of equity capital
risk-return models
build-up models.
author_facet Nicoleta Vintila
author_sort Nicoleta Vintila
title Assessing Discount Rate for a Project Financed Entirely with Equity Capital
title_short Assessing Discount Rate for a Project Financed Entirely with Equity Capital
title_full Assessing Discount Rate for a Project Financed Entirely with Equity Capital
title_fullStr Assessing Discount Rate for a Project Financed Entirely with Equity Capital
title_full_unstemmed Assessing Discount Rate for a Project Financed Entirely with Equity Capital
title_sort assessing discount rate for a project financed entirely with equity capital
publisher General Association of Economists from Romania
series Theoretical and Applied Economics
issn 1841-8678
publishDate 2007-09-01
description Estimating discount rate for an investment project is one of the most challenging tasks incapital budgeting. In this paper we discuss different kind of models for cost of equity capital proposed infinance literature (static CAPM, conditional CAPM, APT, build-up model), focusing especially on advantagesand disadvantages of using each of them. In the final section, we estimate the discount rate fora certain project financed entirely with equity capital, using a version of build-up model.
topic capital budgeting
discount rate
cost of equity capital
risk-return models
build-up models.
url http://www.ectap.ro/articole/247.pdf
work_keys_str_mv AT nicoletavintila assessingdiscountrateforaprojectfinancedentirelywithequitycapital
_version_ 1725299858580963328

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