Assessing Discount Rate for a Project Financed Entirely with Equity Capital
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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General Association of Economists from Romania
2007-09-01
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Online Access: | http://www.ectap.ro/articole/247.pdf |
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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 |