--%>

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 : Llustrate illiquidity risk and small

    My investment bank told me that beta given by Bloomberg incorporates the illiquidity risk and small cap premium since Bloomberg does well-known Bloomberg adjustment formula. Is it true?

  • Q : Who proposed modern quantitative

    Who proposed a modern quantitative methodology for portfolio selection?

  • Q : How can industrial company inflate

    How can any industrial company inflate the value of its inventory so as to decrease net income and the taxes is has to pay in a year?

  • Q : Additive risk in the CAPM Suppose that

    Suppose that the two securities APPL and MSFT account for the entire large cap technology component of the S&P 500 (hypothetically – of course – there are really plenty of others). Further, suppose that their weights in the S&P index were as follow

  • Q : Explain consensus among the chief

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

  • Q : Tax credit for lease payments problem

    ABC Inc. is planning to lease a computer for $3000 per annum, payable in advance, for a period of 4 years. The lease will cover maintenance costs. ABC CFO feels that if he buys the same computer he should be able to sell it at 15% of the purchase price after 4 years.

  • Q : Marketing Decisions & Profitability

    Marketing Decisions Assignment:  Email the answers to the following questions in an attached word document using the proper file name format as follows:  1   

  • Q : State capital formation Capital

    Capital formation: It is an increase in the stock of capital in particular period is termed as capital formation.

  • 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 : Illustrates the Gordon and Shapiro

    What is the importance and the utility of the given formula: Ke = DIV(1+g)/P + g?