The cost of capital in internationally integrated markets: The case of Nestlé
This paper argues that the cost of capital for firms in small countries should be estimated using the global CAPM rather than a local CAPM. Two related formulas showing the mistake made when using a local CAPM rather than a global CAPM are presented. the global CAPM is implemented for the case of Nestlé and the results are compared to the cost of capital estimate one obtains for Nestlé using a local CAPM when the global CAPM is appropriate. Copyright Blackwell Publishers Ltd. 1995.
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Volume (Year): 1 (1995)
Issue (Month): 1 ()
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