Advanced Search
MyIDEAS: Login to save this article or follow this journal

Measuring the Cost of Equity of Emerging Market Firms: The Case of Malaysia

Contents:

Author Info

  • Swee-Sim, Foong

    ()
    (Faculty of Economics and Administration, University of Malaya, 50603 Kuala Lumpur)

  • Kim-Leng, Goh

    (School of Distance Education Universiti Sains Malaysia, 11800 USM ,Pulau Pinang)

Abstract

Valuation in an emerging market like Malaysia poses to be a great challenge because there is no clear single 'best practice' for the valuation of assets and securities in emerging markets. Adopting some of the emerging market models reviewed in Pereiro (2001), together with the two-factor CAPM models proposed in this study, we make a comparison between standard risk measures and downside risk measures to estimate the cost of equity of Malaysian firms over the period of 2000–2007. Overall, the results are consistent with the literature which supports downside risk measures over standard risk measures. Also, our model, which considers both local and global risk factors, has higher explanatory power than models that consider only one kind of risk factor. Most importantly, the results show that unsystematic risks, or firm-specific risks, may have increased in recent years.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://web.usm.my/journal/aamjaf/vol6-1-2010/6-1-2.pdf
Download Restriction: no

Bibliographic Info

Article provided by Penerbit Universiti Sains Malaysia in its journal Asian Academy of Management Journal of Accounting and Finance.

Volume (Year): 6 (2010)
Issue (Month): 1 ()
Pages: 25-46

as in new window
Handle: RePEc:usm:journl:aamjaf00601_25-46

Contact details of provider:
Web page: http://web.usm.my/aamj/
More information through EDIRC

Related research

Keywords: CAPM; cost of equity; downside risk; firm dex;

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Yury Dranev & Sofya Fomkina, 2013. "An asymmetric approach to the cost of equity estimation: empirical evidence from Russia," HSE Working papers, National Research University Higher School of Economics WP BRP 12/FE/2013, National Research University Higher School of Economics.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:usm:journl:aamjaf00601_25-46. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journal Division).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.