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Capital Budgeting: the Romanian Credit Analysts’ Points of View

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Listed:
  • Ingrid-Mihaela Dragota

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Victor Dragota

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Lucian Tâtu

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Daniel Traian Pele

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Nicoleta Vintila

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

  • Andreea Semenescu

    (Academia de Studii Economice / Facultatea de Finante, Asigurari, Banci si Burse de Valori)

Abstract

This study aims to disclose the methods and instruments used by the credit analysts in the most important Romanian banks regarding capital budgeting. It can be noticed that the dominant standpoint converges to the recommendations of the main reference works in corporate finance. Hence, indicators like profitability index, net present value or internal rate of return are preferred by the most part of the credit analysts. Among the techniques of risk quantification, the sensitivity analysis is the most commonly used method by Romanian creditors. About the discount rate used in investment valuation, the main part of the respondents recommends the rate of return for similar projects in the sector.

Suggested Citation

  • Ingrid-Mihaela Dragota & Victor Dragota & Lucian Tâtu & Daniel Traian Pele & Nicoleta Vintila & Andreea Semenescu, 2011. "Capital Budgeting: the Romanian Credit Analysts’ Points of View," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 3(1), pages 039-045, June.
  • Handle: RePEc:rfb:journl:v:03:y:2011:i:1:p:009-045
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    References listed on IDEAS

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    1. Ruthenberg, David & Landskroner, Yoram, 2008. "Loan pricing under Basel II in an imperfectly competitive banking market," Journal of Banking & Finance, Elsevier, vol. 32(12), pages 2725-2733, December.
    2. Victor Dragota & Lucian Tatu & Daniel Pele & Nicoleta Vintila & Andreea Semenescu, 2010. "Capital budgeting: the Romanian university professors' points of view," The Review of Finance and Banking, Academia de Studii Economice din Bucuresti, Romania / Facultatea de Finante, Asigurari, Banci si Burse de Valori / Catedra de Finante, vol. 2(2), pages 95-102, December.
    3. Ingrid Mihaela Dragotă & Andreea Semenescu & Dan Traian Pele & Carmen Lipară, 2007. "Capital Structure And Financial Performance – Related Or Independent Variables? Empirical Study On Romanian Companies Listed On Capital Market," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 11(11(516)(s), pages 143-150, November.
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