Cost of capital in emerging markets: bridging gaps between theory and practice



Document title: Cost of capital in emerging markets: bridging gaps between theory and practice
Journal: Latin american journal of economics
Database: CLASE
System number: 000448516
ISSN: 0719-0425
Authors: 1
Institutions: 1Pontificia Universidad Católica de Chile, Facultad de Administración, Santiago de Chile. Chile
Year:
Season: Dic
Volumen: 53
Number: 1
Pages: 111-147
Country: Chile
Language: Inglés
Document type: Artículo
Approach: Analítico, descriptivo
English abstract 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
Disciplines: Economía
Keyword: Condiciones económicas,
Inversiones,
Inversión extranjera,
Costo de capital,
Mercados emergentes,
Riesgo de mercado,
Riesgo financiero,
Riesgo cambiario
Full text: Texto completo (Ver PDF)