--%>

Compute a company's cost of capital in emerging nations

How can we compute a company's cost of capital in emerging nations, particularly when there is no state bond that we could take as a reference?

E

Expert

Verified

However, there is no state bond whose flows could be seemed “risk-free,” the needed return to shares is an issue of common sense (here experience also helps): this is the rate at which we compute the present value of flows, considering the risk.

   Related Questions in Corporate Finance

  • Q : What is optimal capital structure What

    What is optimal capital structure?

  • Q : Selling or purchasing problem Atlas

    Atlas Realty Company is interested in buying a house and renting it out for $12,000 a year, collecting the rent in advance each year. This will depreciate the house over 25 years; however sell it after 15 years at twice its purchase price. The maintenance expenditures

  • Q : Real estate problem Eric Rowan is

    Eric Rowan is planning to buy a house for $155,000 by borrowing money at the rate of 9%. He expects to rent the house for 5 years, collecting $20,000 annual rent in advance each year. He thinks that he can sell the house for $175,000 after five years. Fulton has incom

  • Q : Explain usual value of the sales of net

    Does the usual value of the sales and of the net income of Spanish companies have anything to do along with sustainable growth?

  • Q : Why classical option pricing required

    Why classical option pricing with constant volatility required?

  • Q : Explain realization of name valuation

    I suppose that a valuation consciously realized in my name tells me how much I have to offer for the company, am I right?

  • Q : Difference between intrinsic value and

    XYZ explained the difference between intrinsic value and book value in terms of the money spent on a college education. Please provide another example using a different simile.

  • Q : Problem on raising new capital AB

    AB Corporation has 3 million shares of common stock selling at $19 each. It also contains $25 million in bonds with coupon rate of 8%, selling at par. AB requires $10 million in new capital that it can raise by selling stock at $18, or bonds at 9% interest. The expect

  • Q : International financial what can we

    what can we expanded opportinity set of international finance?

  • Q : Investors are irrational or naive

    Explain how companies with substandard financial history can draw the attention of investors. Are investors irrational or naive?