Cost-of-Capital in Managerial Finance

Beschreibung

This book examines cost-of-capital models and their application in the context of managerial finance. This includes the use of hurdle rates in capital allocation decisions, as well as target returns in performance management. Besides a review of classical finance models such as the Capital Asset Pricing Model (CAPM), other contemporary models and techniques to determine the cost-of-capital of business units and private companies are discussed. Based on a mixed methods approach, current cost-of-capital practices and their determinants are  empirically analyzed among German companies.
This book examines cost-of-capital models and their application in the context of managerial finance. This includes the use of hurdle rates in capital allocation decisions, as well as target returns in performance management. Besides a review of classical finance models such as the Capital Asset Pricing Model (CAPM), other contemporary models and techniques to determine the cost-of-capital of business units and private companies are discussed. Based on a mixed methods approach, current cost-of-capital practices and their determinants are empirically analyzed among German companies.
Presents a comprehensive review of classical finance models Shares business insights based on expert interviews and a large sample survey Scientifically explains determinants of the theory-practice gap Includes supplementary material: sn.pub/extras

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Dennis Schlegel

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Agency theory CAPM Capital allocation Capital budgeting Managerial finance WACC

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