Risk and Return on Uganda's stock exchange

Abubaker Mayanja and Kenneth Legesi

MPRA Paper from University Library of Munich, Germany

Abstract: Using data from 2003-2007, we calculate the systematic risk and cost of equity for firms listed on USE; Preliminary estimates show that nominal Cost of equity capital reduced over time from 63.24 percent (January 2005 to January 2006) to 18% (February 2006 to March 2007). The efficient frontier shifted below in the period considered to suggest a general lowering of expected returns on portfolios, re-affirming the notion that stock markets lead to reduction in the cost of funds; and thus a viable option to bank finance that at the moment is considered prohibitive with annual percentage rates of between 20-25.

Keywords: Cost of equity capital; Beta; CAPM; Uganda Securities Exchange (USE) (search for similar items in EconPapers)
JEL-codes: G11 G15 G32 (search for similar items in EconPapers)
Date: 2007-07, Revised 2007-08
New Economics Papers: this item is included in nep-cfn and nep-rmg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:6407

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