--%>

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 : Which capital structure must consider

    Which capital structure must we consider when estimating the WACC for a subsidiary valuation: the one which is reasonable according to the risk of the subsidiary’s business that the average of the company or the one the subsidiary as “tolerates/per

  • Q : Calculating the Cost of Equity You are

    You are an analyst in the financial division of Flipper Industries (FI) which has a beta of 1.80 (you are risk-philic, so you enjoy the thrill of working somewhere so risky). The company just paid a dividend of $1 and dividends are expected to grow at 5% per year. The

  • Q : Weighted return and simple return to

    What is the difference between weighted return and simple return to shareholders?

  • Q : Explain consensus among the chief

    Is there any consensus among the chief authors in finance concerning the market risk premium?

  • Q : Explain Corporate Development Corporate

    Corporate Development: Corporate development is a term which references the range of planning options and strategies which can assist to move a company toward its targets. The procedure of this kind of strategic development can be exerted to just abou

  • Q : Benefits of working capital requirement

    Benefits of working capital requirement estimation: • Helps to judge the efficiency of utilization of working capital in generation of sales • Cost of capital aspect

  • Q : Compute the present value of the

    Is this possible to value companies by computing the present value of the Economic Value Added (EVA)?

  • Q : How companies accuse investors make

    Sometimes, companies accuse investors of performing credit sales which they make their quotations fall. Is it true?

  • Q : What is the current example of a value

    What is the current example of a value company and would you buy it as an investment. Why or why not?

  • Q : Does the equity of shareholders have

    Does the equity of shareholders represents the savings a company has accumulated by the years?