Gaps Identified In Econometric Models For Cost Of Capital Estimation Already Built
AbstractApplying mathematical models to assess the cost of capital is frequently used for investments in marketable assets in the stock market. Using these models to substantiate investments management decisions has to provide accurate estimations of future yields or otherwise, to eliminate the uncertainty specific for the financial environment. This paper is part of a complex research on econometric models of estimation that identifies weaknesses of the already built models, bringing empirical evidence on these controversies identified and justifying the lack of confidence expressed by managers on econometric estimation methods used for financial results. Research results point to the controversies that need to be eliminated or minimized when building a new econometric model to estimate the cost of capital.
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Bibliographic InfoArticle provided by The Bucharest University of Economic Studies in its journal Journal of Doctoral Research in Economics.
Volume (Year): 3 (2011)
Issue (Month): 2 (June)
risk free rate; risk premium; volatility coefficient; emerging capital markets;
Find related papers by JEL classification:
- C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
- C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
- D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search, Learning, and Information
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