Risk, Duration, and Capital Budgeting: New Evidence on Some Old Questions
AbstractIn a provocative article John Y. Campbell and Jianping Mei (1993) suggest that systematic risk arises not because of correlation between a company's cash flow and the market return but primarily because of common variation in expected returns. If true, the Campbell-Mei hypothesis has important implications for capital budgeting, particularly at high-technology companies that have long duration, idiosyncratic investment projects. This article presents some new evidence related to the Campbell-Mei hypothesis and then evaluates the impact of the hypothesis with a case study of Amgen Corporation. Copyright 1999 by University of Chicago Press.
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Bibliographic InfoArticle provided by University of Chicago Press in its journal Journal of Business.
Volume (Year): 72 (1999)
Issue (Month): 2 (April)
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