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CAPM and capital budgeting: present versus future, equilibrium versus disequilibrium, decision versus valuation

Magni, Carlo Alberto - Volkswirtschaftliche Fakultät, … - 2007

This paper deals with the use of the CAPM for capital budgeting purposes. Four different measures are deductively drawn from this model: the disequilibrium Net Present Value, the equilibrium Net Present Value, the disequilibrium Net Future Value, the equilibrium Net Future Value. While all of...

Persistent link: https://www.econbiz.de/10005055505

Correct or incorrect application of CAPM? Correct or incorrect decisions with CAPM?

Magni, Carlo Alberto - Volkswirtschaftliche Fakultät, … - 2007

) CAPM capital budgeting decision-making based on disequilibrium NPV is deductively inferred by the Capital Asset Pricing … Model, (ii) the use of the disequilibrium NPV is widespread in finance both as a decision rule and as a valuation tool, (iii …’s (2005) project valuation method, on the basis of which Magni’s criticism to NPV is objected, leaves decision makers open to …

Persistent link: https://www.econbiz.de/10005836868

Investment decisions, equivalent risk and bounded rationality

Magni, Carlo Alberto - Volkswirtschaftliche Fakultät, … - 2007

cognitive analysis of the decision-making process implied by the maximization problem. The model may be conveniently rescued if … ‘mixed strategy’, currently in use by many real-life decision makers, opens up terrain to a fruitful cooperation between …

Persistent link: https://www.econbiz.de/10005619621

Economic profit, NPV, and CAPM: Biases and violations of Modigliani and Miller's Proposition I

Magni, Carlo Alberto - Volkswirtschaftliche Fakultät, … - 2005

investor might undertake and is often found by making recourse to the Capital Asset Pricing Model. This paper shows that the …

Persistent link: https://www.econbiz.de/10011108248

Residual income and value creation: An investigation into the lost-capital paradigm

Magni, Carlo Alberto - Volkswirtschaftliche Fakultät, … - 2007

budgeting decision-making …

Persistent link: https://www.econbiz.de/10011111180

Measuring performance and valuing firms: In search of the lost capital

Magni, Carlo Alberto - Volkswirtschaftliche Fakultät, … - 2007

Residual income as commonly described in academic papers and in real-life applications may be formally described as a function of three variables: (i) the capital invested, (ii) the rate of return, (iii) the opportunity cost of capital. This paper shows that a different paradigm of residual...

Persistent link: https://www.econbiz.de/10011113662

CAPM-based capital budgeting and nonadditivity

Magni, Carlo Alberto - Volkswirtschaftliche Fakultät, … - 2006

This paper deals with the CAPM-derived capital budgeting criterion, and in particular with Rubinstein’s (1973) criterion, according to which a project is profitable if the project rate of return is greater than the risk-adjusted cost of capital, where the latter depends on the project’s...

Persistent link: https://www.econbiz.de/10011267900

Scomposizione di sovraprofitti: Economic Value Added e Valore Aggiunto Sistemico

Magni, Carlo Alberto - Volkswirtschaftliche Fakultät, … - 2000

The Economic Value Added formally translates the theoretical notion of excess profit (also known as residual income). Its use is so firmly entrenched in applied corporate finance and management accounting that its name is often used as a noun for denoting the concept of excess profit itself....

Persistent link: https://www.econbiz.de/10005789279

Residual income and value creation: An investigation into the lost-capital paradigm

Magni, Carlo Alberto - Volkswirtschaftliche Fakultät, … - 2007

budgeting decision-making …

Persistent link: https://www.econbiz.de/10005789544

Valore Aggiunto Sistemico: un'alternativa all'EVA quale indice di sovraprofitto periodale

Magni, Carlo Alberto - Volkswirtschaftliche Fakultät, … - 2001

This work presents a notion of residual income called Systemic Value Added (SVA). It is antithetic to Stewart’s (1991) EVA, though it is consistent with it in overall terms: a project’s Net Final Value (NFV) can be computed as the sum of capitalized EVAs or as the sum of uncapitalized SVAs....

Persistent link: https://www.econbiz.de/10005790189