Results 181 to 190 of about 33,187 (225)
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Growth Expectations out of WACC
SSRN Electronic Journal, 2020We reconcile the empirically flat relation between historical betas and stock returns (flat security market line) with the common usage of the CAPM based on historical betas in valuation. Analysts bias cash flow growth expectations upwards for high-beta firms, so that the value-reducing effect of higher historical systematic risk cancels out and buy ...
Petri Jylha, Michael Ungeheuer
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SSRN Electronic Journal, 2005
The estimation of corporate capital costs is complicated by many practical issues that create numerous degrees of freedom and lead to wide-ranging results. We provide pragmatic solutions including: * A global market risk premium (MRP) of about 5%, based on historical data, market expectations, and a review of the literature * Several methods to derive ...
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The estimation of corporate capital costs is complicated by many practical issues that create numerous degrees of freedom and lead to wide-ranging results. We provide pragmatic solutions including: * A global market risk premium (MRP) of about 5%, based on historical data, market expectations, and a review of the literature * Several methods to derive ...
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Business Valuation Review, 2005
This article clarifies some of the issues raised by the author in an earlier article. It is also a reply to criticisms advanced by J. Morris. Regarding the controversy of book versus market-value weights, it is shown that, aside from not being grounded in proper theory, market-value weights computed through iterations are not even needed: in simple ...
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This article clarifies some of the issues raised by the author in an earlier article. It is also a reply to criticisms advanced by J. Morris. Regarding the controversy of book versus market-value weights, it is shown that, aside from not being grounded in proper theory, market-value weights computed through iterations are not even needed: in simple ...
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Goldilocks and the Three WACCs
SSRN Electronic Journal, 2020This paper presents three different approaches for calculating the levered annual values for a finite cash flow profile. In the first approach, we use KU, the return to unlevered equity to calculate the annual tax savings and use KU to calculate the (present) value of the tax savings. In the second approach, we use KD, the cost of debt to calculate the
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Will the Deflated WACC Please Stand Up? And the Real WACC Should Sit Down
SSRN Electronic Journal, 2010In a world with taxes, there is a small discrepancy between the deflated WACC WACCDef and the real wacc. This is due to the (1-T) term that is in the standard expression for the WACC applied to the Free Cash Flow (FCF). We compare different approaches for valuing nominal and real cash flows with the 1) nominal Weighted Average Cost of Capital, WACC, 2)
Joseph Tham, Ignacio Velez-Pareja
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Application of WACC in Automobile Enterprises
Advances in Economics, Management and Political Sciences, 2023With the global promotion of energy conservation and emission reduction in recent years, some new energy vehicle enterprises are emerging in the market. To avoid potential risks in the new energy vehicle market with over-investment, the paper selects Tesla, BYD, and Toyota as examples, and uses CAPM and WACC to calculate and analyze the risks of three ...
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2013
Thus far, we have done a great deal of preparatory work. In the remaining two chapters, we will finally get to reap the rewards of all this hard work. The efforts that have gone into calculating the various pieces of the puzzle are now going to pay off as those pieces begin to come together. There are two topics covered in this chapter.
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Thus far, we have done a great deal of preparatory work. In the remaining two chapters, we will finally get to reap the rewards of all this hard work. The efforts that have gone into calculating the various pieces of the puzzle are now going to pay off as those pieces begin to come together. There are two topics covered in this chapter.
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SSRN Electronic Journal, 2012
WACC has traditionally been used as a measure of the cost of capital for companies and as a discount rate of the future company's cash flows for valuation purposes. The WACC, especially for "distressed" companies, can play a key role in determining the efficiency of the restructuring framework for companies heading into bankruptcy.
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WACC has traditionally been used as a measure of the cost of capital for companies and as a discount rate of the future company's cash flows for valuation purposes. The WACC, especially for "distressed" companies, can play a key role in determining the efficiency of the restructuring framework for companies heading into bankruptcy.
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WACC as the touchstone performance indicator
International Journal of Contemporary Hospitality Management, 2008PurposeThe purpose of this paper is to propose a simple framework to help practitioners to analyze and evaluate their performance more accurately and easily from the perspective of value adding concept.Design/methodology/approachThe proposed framework separates management and operations into two different functions in the flows of capital investment ...
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