scholarly journals Country Risk Components, the Cost of Capital, and Returns in Emerging Markets

2004 ◽  
Author(s):  
Campbell R. Harvey
Keyword(s):  
Emerging Markets ◽  
Cost Of Capital ◽  
Country Risk ◽  
The Cost

The cost of equity estimation in emerging Europe: the case of Bulgarian REITs

2015 ◽  
Vol 33 (6) ◽  
pp. 517-529 ◽  
Author(s):  
Nigokhos Krikorov Kanaryan ◽  
Peter Chuknyisky ◽  
Violeta Kasarova
Keyword(s):  
Emerging Markets ◽  
Factor Model ◽  
Objective Measure ◽  
Country Risk ◽  
Time Varying ◽  
Cost Of Equity ◽  
Content Type ◽  
Investment Bankers ◽  
Proposed Model ◽  
The Cost

Purpose – The International Valuations Standards Committee adopts the Capital Asset Pricing Model as a method for estimation of the cost of equity. It has several drawbacks and appraisers in emerging markets need more useful model for cost of equity estimation. The paper aims to discuss these issues. Design/methodology/approach – The proposed model is a modification of the Salomon Smith Barney model for cost of capital determination. The econometric part of the model incorporates the non-synchronous effect, the thin trading effect, the time varying risk nature, and the systematic country risk. Findings – The model estimates the cost of equity of Bulgarian REITs more accurate than the one, who uses the traditional β estimation. Practical implications – The study provides appraisers, business consultants, and investment bankers with a consistent model for cost of equity estimation. The model incorporates most of the features of emerging markets REITs return series and avoids the weaknesses of the single-factor model for cost of equity estimation in emerging markets. Originality/value – The proposed model reflects the following characteristics: the degree of diversification of the particular investor (imperfectly diversified); country risk; and time-varying risk nature. The political risk is incorporated by more objective measure of the systematic country risk.

Should the cost of capital, used in connection with goodwill impairment testing, vary across countries?

2020 ◽  
Vol 10 (2) ◽  
pp. 1-20
Author(s):  
Elie Salameh
Keyword(s):  
Discount Rate ◽  
Cost Of Capital ◽  
Country Risk ◽  
Content Type ◽  
Goodwill Impairment ◽  
Academic Level ◽  
Postgraduate Level ◽  
The Cost ◽  
The Impact

Learning outcomes Through the discussion of this case, students will have better understanding of the conceptual stakes related to accounting treatment for goodwill and factors determining goodwill impairment testing. The case also discusses the determination of the cost of capital and the impact of taking into account certain factors related to country risk for determining the discount rate in an international framework. Case overview/synopsis Greenfields Company continues to expand through acquisitions in emerging markets. The company aims to overcome the complexity of measuring goodwill subsequent to the initial recognition. The case was written to illustrate challenges of estimating the appropriate discount rate to be used in the goodwill impairment testing as investments in emerging countries give rise to many discount rate measurement problems such as the availability of statistical data and the risk assessment to be considered. Complexity academic level The case can be used at undergraduate or postgraduate level and it requires fundamental knowledge in accounting and corporate finance. Supplementary materials Teaching Notes are available for educators only. Subject code CSS 1: Accounting and Finance.

An Introduction to the Cost of Capital

2010 ◽  
Author(s):  
Ignacio Velez-Pareja ◽  
Joseph Tham
Keyword(s):  
Cost Of Capital ◽  
The Cost

Institutional Investors, Private Information, and the Cost of Capital

2011 ◽  
Author(s):  
Huong Giang (Lily) Nguyen ◽  
Xiangkang Yin ◽  
Luong Hoang Luong
Keyword(s):  
Private Information ◽  
Institutional Investors ◽  
Cost Of Capital ◽  
The Cost
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