The paper aims at elucidating and solving the methodological problems around the estimation of the cost of capital in the project finance settings. By convention, capital budgeting analysts evaluate project finance ventures using the free cash flow for equity (FCFE) method, whereby cash flows,...

This paper explores the multifaceted nature of risk in financial decision-making by integrating traditional finance models with insights from behavioural finance. It assesses the application of models such as the Capital Asset Pricing Model (CAPM), Weighted Average Cost of Capital (WACC), and...

Financial management practices play a crucial role in shaping the performance and growth of enterprises. Financial management involves arranging both short-term and long-term funding needs, ensuring the smooth functioning of enterprises. This research aimed to examine the relationship between...

We examine how division managers' human capital affects internal capital allocation using a hand-collected data set of divisional managers at S&P 1,500 firms. Based on a novel measure of division-manager ability, we show that more able division managers receive substantially larger capital...

The success of agricultural Small and Medium Enterprises (agri-SMEs), among other factors, heavily relies on their ability to manage finances effectively. This study examined the extent to which agricultural SMEs in Tanzania practice financial management activities. The study employed a...

Modern-day firms, both small and medium enterprises (SMEs) and large listed firms (LLFs) practice distinct investment appraisal approaches known as conventional and sophisticated capital budgeting techniques. Despite these prominent developments, the extant literature is yet to empirically...

Textbook theory assumes that firm managers maximize the net present value of future cash flows. But when you ask them, the people running large public corporations say that they are maximizing something else entirely: earnings per share (EPS). Perhaps this is a mistake. No matter. We take...

This paper proposes a model aiming at decomposing the Net Final Value of a project under certainty. It makes use of a systemic outlook: the investor's net worth is regarded as a dynamic system whose structure changes over time. On this basis, a profitability index is presented, here named...

This study uses a survey approach to investigate how managers associated with thirty (30) firm characteristics subgroups apply thirty-seven (37) investment decision techniques in practice in a frontier market covering: capital budgeting, cost of equity, cost of capital, and adjustments for other...

We investigate the decision rules for corporate investment by designing a company value frontier. This company value frontier allows for balancing the financial value and social and environmental impacts. This article develops novel value concepts-ranging from shareholder value to shareholder...

In these extracts from the world's bestselling graduate textbook, the authors offer a number of suggestions for practitioners, including: - When valuing a company or an investment project, managers should start whenever possible with the asset's market price as the best initial estimate and then...

To increase a company's earnings, a project must generate enough income next year to pay for its own financing. Hence, a manager who wants to maximize her EPS (earnings per share) should only invest in accretive projects that have income yields above the firm's cheapest financing option. This is...

Budgets are a compass and guiding light for businesses. Therefore, management and owners of small and medium enterprises (SMEs) must carry out suitable and precise capital budgeting activities and methods to ensure business longevity and progression. There is a high risk of SMEs failing soon...

Operative und strategische Ansatzpunkte für die unternehmenswertorientierte Steuerung eines Unternehmens. Unternehmenswerte stehen im Zentrum vielfältigster Entscheidungen und Transaktionen. Ihre Höhe wird dabei vor allem durch die zukünftig erwarteten Erfolge und die damit verbundenen...

1 Merkmale von Unternehmen, Akteuren und Produkten -- 2 Entscheidungstheorie -- 3 Produktplanung und Produktgestaltung -- 4 Produktion -- 5 Jahresabschluss und Jahresabschlussanalyse -- 6 Kostenrechnung -- 7 Finanzierung -- 8 Investitionsrechnung -- 9 Kooperative Spieltheorie.

We study hand-collected data on firms' perceptions of their cost of capital. Firms with higher perceived cost of capital earn higher returns on invested capital and invest less, suggesting that the perceived cost of capital shapes long-run capital allocation. The perceived cost of capital is...

To understand their financial position, universities need to understand the long-term implications of their operating revenues and costs in relation to the financial assets they have available. Standard budgeting procedures that focus on one or two years at a time and use generally accepted...

This is an acceptable fact that firms put efforts to maximize shareholders wealth but there is growing demand that firms are also accountable to various stakeholders associated directly or indirectly with the firms' business activities. Investors now evaluate firm's performance not only from...