COST OF CAPITAL IN EMERGING MARKETS: BRIDGING GAPS BETWEEN THEORY AND PRACTICE

COST OF CAPITAL IN EMERGING MARKETS: BRIDGING GAPS BETWEEN THEORY AND PRACTICE

An important parameter for asset and project valuation is the opportunity cost of the capital invested, which depends on the systematic risks assumed. Having many angles, the existing literature has not fully resolved the issue for emerging markets. The evidence reviewed in this article suggests tha...

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Autor principal: Walker,Eduardo
Lenguaje:English
Publicado: Pontificia Universidad Católica de Chile. Instituto de Economía. 2016
Materias:
Cost of capital
emerging markets
market risk
credit risk
currency risk
Acceso en línea:http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332016000100006
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spelling oai:scielo:S0719-043320160001000062017-02-02COST OF CAPITAL IN EMERGING MARKETS: BRIDGING GAPS BETWEEN THEORY AND PRACTICEWalker,Eduardo Cost of capital emerging markets market risk credit risk currency risk An important parameter for asset and project valuation is the opportunity cost of the capital invested, which depends on the systematic risks assumed. Having many angles, the existing literature has not fully resolved the issue for emerging markets. The evidence reviewed in this article suggests that we should at least consider exposure to market risk and country credit risk factors. After reviewing the theoretical and applied literature on cost of capital determination and international asset pricing models, the paper identifies and applies methodologies to determine discount rates applicable to emerging markets for different countries and currencies and develops methodologies for empirically measuring exposure to the country credit risk factor.info:eu-repo/semantics/openAccessPontificia Universidad Católica de Chile. Instituto de Economía.Latin american journal of economics v.53 n.1 20162016-12-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332016000100006en10.7764/LAJE.53.1.111
institution Scielo Chile
collection Scielo Chile
language English
topic Cost of capital
emerging markets
market risk
credit risk
currency risk
spellingShingle Cost of capital
emerging markets
market risk
credit risk
currency risk
Walker,Eduardo
COST OF CAPITAL IN EMERGING MARKETS: BRIDGING GAPS BETWEEN THEORY AND PRACTICE
description An important parameter for asset and project valuation is the opportunity cost of the capital invested, which depends on the systematic risks assumed. Having many angles, the existing literature has not fully resolved the issue for emerging markets. The evidence reviewed in this article suggests that we should at least consider exposure to market risk and country credit risk factors. After reviewing the theoretical and applied literature on cost of capital determination and international asset pricing models, the paper identifies and applies methodologies to determine discount rates applicable to emerging markets for different countries and currencies and develops methodologies for empirically measuring exposure to the country credit risk factor.
author Walker,Eduardo
author_facet Walker,Eduardo
author_sort Walker,Eduardo
title COST OF CAPITAL IN EMERGING MARKETS: BRIDGING GAPS BETWEEN THEORY AND PRACTICE
title_short COST OF CAPITAL IN EMERGING MARKETS: BRIDGING GAPS BETWEEN THEORY AND PRACTICE
title_full COST OF CAPITAL IN EMERGING MARKETS: BRIDGING GAPS BETWEEN THEORY AND PRACTICE
title_fullStr COST OF CAPITAL IN EMERGING MARKETS: BRIDGING GAPS BETWEEN THEORY AND PRACTICE
title_full_unstemmed COST OF CAPITAL IN EMERGING MARKETS: BRIDGING GAPS BETWEEN THEORY AND PRACTICE
title_sort cost of capital in emerging markets: bridging gaps between theory and practice
publisher Pontificia Universidad Católica de Chile. Instituto de Economía.
publishDate 2016
url http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332016000100006
work_keys_str_mv AT walkereduardo costofcapitalinemergingmarketsbridginggapsbetweentheoryandpractice
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