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Regulatory independence and political interference : evidence from EU mixed-ownership utilities’ investment and debt

Cambini, Carlo; Rondi, Laura - 2010 - This draft: 11 May 2010

account key institutional features of EU public utilities, such as: a) regulation by agencies with various degrees of …

Persistent link: https://www.econbiz.de/10008729094

Survey: market risk premium and risk-free rate used for 81 countries in 2020

Fernández, Pablo; Apellániz, Eduardo de; Acín, Javier F. - 2020

This paper contains the statistics of a survey about the Risk-Free Rate (RF) and the Market Risk Premium (MRP) used in 2020 for 81 countries. We got answers for 87 countries, but we only report the results for 81 countries with more than 6 answers.Many respondents use for European countries a RF...

Persistent link: https://www.econbiz.de/10012704009

Equity Premium : Historical, Expected, Required and Implied

Fernandez, Pablo - 2019

The equity premium designates four different concepts: Historical Equity Premium (HEP); Expected Equity Premium (EEP); Required Equity Premium (REP); and Implied Equity Premium (IEP).lt;brgt;lt;brgt;We highlight the confusing message of the textbooks and academic articles regarding the equity...

Persistent link: https://www.econbiz.de/10012706191

Are Calculated Betas Good for Anything?

Fernandez, Pablo - 2019

We calculate betas of 3,813 companies using 60 monthly returns each day of December 2001 and January 2002. lt;brgt;lt;brgt;The median of [maximum beta/minimum beta] was 3.07. lt;brgt;lt;brgt;Industry betas are also very unstable. The median (average) of the percentage daily change (in absolute...

Persistent link: https://www.econbiz.de/10012706305

The Capital Asset Pricing Model in Economic Perspective

Dawson, Peter C. - 2020

The Capital Asset Pricing Model (CAPM) is theoretically incomplete in its demand-side focus, risk-averse investors, and … investors can earn higher returns by bearing un-diversifiable risk. Our paper does not merely extend the CAPM with more …) investors who can have heterogeneous expectations or beliefs — an overlooked but required condition for the CAPM to be an …

Persistent link: https://www.econbiz.de/10012857018

Cost of Capital with Levered Cost of Equity as the Risk of Tax Shields

Tham, Joseph - 2011

We present the derivation of cost of capital under the assumption of risky tax shields discounted with the cost of levered equity. We show that the formulation is consistent and is derived from basic financial principles. This formulation is valid for finite cash flows and non growing...

Persistent link: https://www.econbiz.de/10013133138

Valuing Companies by Cash Flow Discounting : Ten Methods and Nine Theories

Fernandez, Pablo - 2019

This paper shows 10 valuation methods based on equity cash flow; free cash flow; capital cash flow; APV (Adjusted Present Value); business's risk-adjusted free cash flow and equity cash flow; risk-free rate-adjusted free cash flow and equity cash flow; economic profit; and...

Persistent link: https://www.econbiz.de/10012746548

The most common error in valuations using WACC

Fernández, Pablo - 2020

To value shares there are two usual methods that, if properly applied, provide the same value: 1/ Present value of expected free cash flows (FCF) discounted with the WACC rate and then, subtract the value of debt; and 2/ Present value of expected equity cash flows (ECF) discounted with the Ke...

Persistent link: https://www.econbiz.de/10012704170

A wrong valuation using WACC and the right solution

Fernández, Pablo - 2020

This paper presents a real valuation performed by a well-known investment bank, with two common errors and with two very different values for the equity of a firm:a) €6,9 million calculating the Present Value of expected free cash flows (FCF) discounted with the WACC rate and then, subtracting...

Persistent link: https://www.econbiz.de/10012704176

119 Common Errors in Company Valuations

Fernandez, Pablo - 2019

This paper contains a collection and classification of 119 errors seen in company valuations performed by financial analysts, investment banks and financial consultants. The author had access to most of the valuations referred to in this paper in his capacity as a consultant in company...

Persistent link: https://www.econbiz.de/10012706124