We show that project evaluation should be based on free cash flows at nominal prices. We present a case where the results from the constant price method are biased upwards and there is a risk to accept bad projects. It is a widespread practice to evaluate projects at constant prices. With an...

The equity premium (also called market risk premium, equity risk premium, market premium and risk premium), is one of the most important, discussed but elusive parameters in finance. The term equity premium is used to designate four different concepts (although many times they are mixed):...

In this paper I discuss the modeling of the yield in discrete time. The popular Nelson-Siegel model and the Vasicek-factors model are presented in the same framework then it is simple to compare them.

The pricing of commodity derivatives requires that the underlying asset be modelled with mean reversion and high volatility. We develop closed formulas to price the spot of the commodity, its future, and to price a call option on the spot and on the commodity future, in the real world and under...

The model proposed by Nelson and Siegel (1987) has been used for several researcher to fit the yield curve. In this paper we propose a discrete-time version of that model by using dynamic factors, such that the model is dynamic in the sense proposed by Diebold and Li (2006). We found the exact...

Do the persistence-predictability of earnings and reputation, affects dividend policy? This study provides new elements to enrich the debate around the question. To this end, a data panel of companies listed in Latin America is structured with financial information obtained in the Datastream...

The purpose of this article is to observe the relationship that exists between the variation of the ICCV and ICCP with respect to the prices of the variable income shares of the construction companies listed in the Colombian Stock Exchange [BVC]. In order to make this observation, it was...

Portfolios dollarization, understood as the holding of assets in foreign currency by domestic agents, has become a recurrent process in economies that present high levels of macroeconomic and exchange rate stress, among which the Argentine Republic stands out. One of the objectives of this paper...

This article aims to present a literature review on financial contagion, both from a theoretical and empirical perspective, with special attention to the cases of emerging markets. It is found that the definition of financial contagion is a concept under construction and there is no concession...