Privatization and the Corporate Cost of Capital in New Zealand: An Application of Fama and French (1999)

Patricia A. McGraw

Review of Applied Economics, 2005, vol. 01, issue 01, 25

Abstract: Fama and French’s (1999) internal rate of return method is applied to Datastream data from 1993-2001 for 81 non-financial firms listed on the New Zealand Stock Exchange. The nominal return on value is 7.09%. The real return on value is 5.07%. The nominal return on cost is 11.59%. The real return on cost is 9.48%. The 10 former state-owned enterprises have nominal and real returns significantly higher than the 71other publicly-listed companies and their capital structures and market-to-book values differ significantly. Return on corporate investment has been profitable but real and nominal compound returns and simple returns have declined over time.

Keywords: Financial Economics; Industrial Organization; Research Methods/Statistical Methods (search for similar items in EconPapers)
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:reapec:143482

DOI: 10.22004/ag.econ.143482

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