Risk sensitivity indicator as correction factor for cost of capital rate
Cost of capital rate is a result of risk included in cost of debt rates and cost of equity rates. Generally to estimate cost of capital rates with use of CAPM conception, is used information about general risk indicator, known as beta coefficient and relations between debt and equity rates. Such approach in unmodified version, falsely gives the similar results for enterprises from the same sector and with similar levels of debt to equity relations. In paper is presented risk sensitivity indicator conception which allows to differentiate cost of capital rate between more risk sensitive businesses and less sensitive businesses.
|Date of creation:||28 Dec 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 431 8814-1
Fax: +49 431 8814-520
Web page: http://www.econstor.eu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Simona Mateut & Spiros Bougheas & Paul Mizen, .
"Corporate trade credit and inventories: New evidence of a tradeoff from accounts payable and receivable,"
08/09, University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM).
- Bougheas, Spiros & Mateut, Simona & Mizen, Paul, 2009. "Corporate trade credit and inventories: New evidence of a trade-off from accounts payable and receivable," Journal of Banking & Finance, Elsevier, vol. 33(2), pages 300-307, February.
- Grzegorz Michalski, 2013.
"Planning Optimal From the Firm Value Creation Perspective Levels of Operating Cash Investments,"
- Michalski, Grzegorz, 2010. "Planning Optimal From The Firm Value Creation Perspective. Levels Of Operating Cash Investments," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 198-214, March.
- Stewart C. Myers & Raghuram G. Rajan, 1995.
"The Paradox of Liquidity,"
NBER Working Papers
5143, National Bureau of Economic Research, Inc.
- Kim, Yong H & Atkins, Joseph C, 1978. "Evaluating Investments in Accounts Receivable: A Wealth Maximizing Framework," Journal of Finance, American Finance Association, vol. 33(2), pages 403-12, May.
- Michalski, Grzegorz, 2008.
"Value-Based Inventory Management,"
EconStor Open Access Articles,
ZBW - German National Library of Economics, pages 82-90.
- Opler, Tim & Pinkowitz, Lee & Stulz, Rene & Williamson, Rohan, 1999.
"The determinants and implications of corporate cash holdings,"
Journal of Financial Economics,
Elsevier, vol. 52(1), pages 3-46, April.
- Tim Opler & Lee Pinkowitz & Rene Stulz & Rohan Williamson, 1997. "The Determinants and Implications of Corporate Cash Holdings," NBER Working Papers 6234, National Bureau of Economic Research, Inc.
- Beck, Stacie & Stockman, David R., 2005. "Money as real options in a cash-in-advance economy," Economics Letters, Elsevier, vol. 87(3), pages 337-345, June.
- Kim, Chang-Soo & Mauer, David C. & Sherman, Ann E., 1998. "The Determinants of Corporate Liquidity: Theory and Evidence," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 33(03), pages 335-359, September.
- Robert Parrino & Allen M. Poteshman & Michael S. Weisbach, 2002.
"Measuring Investment Distortions when Risk-Averse Managers Decide Whether to Undertake Risky Projects,"
NBER Working Papers
8763, National Bureau of Economic Research, Inc.
- Robert Parrino & Allen M. Poteshman & Michael S. Weisbach, 2005. "Measuring Investment Distortions when Risk-Averse Managers Decide Whether to Undertake Risky Projects," Financial Management, Financial Management Association, vol. 34(1), Spring.
- Michalski, Grzegorz, 2007.
"Portofolio Managament Approach in Trade Credit Decision Making,"
Journal for Economic Forecasting,
Institute for Economic Forecasting, vol. 4(3), pages 42-53, September.
- Grzegorz Michalski, 2013. "Portfolio Management Approach in Trade Credit Decision Making," Papers 1301.3823, arXiv.org.
- Leigh A. Riddick & Toni M. Whited, 2009. "The Corporate Propensity to Save," Journal of Finance, American Finance Association, vol. 64(4), pages 1729-1766, 08.
When requesting a correction, please mention this item's handle: RePEc:zbw:esconf:67534. 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: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.