Application of Modern Methods for Assessing the Financial Performance of Investment Projects in Non-public Enterprises

Margarita Alexandrova ()
Additional contact information
Margarita Alexandrova: University of National and World Economy, Sofia, Bulgaria

Nauchni trudove, 2016, issue 1, 35-75

Abstract: Evaluating the cost-effectiveness of investment in real assets should be carried out taking into account whether the investor invests in a diversified portfolio, or assumes the entire risk. If the investor takes all the risk because they do not diversify their investments, then the cost of equity financing should be calculated with the Total Beta. Total Beta is significantly higher than the Market Beta. The cost of equity financing in public enterprises is significantly higher than that of public limited companies. The use of market beta in assessing the financial efficiency of investment projects for investments in non-public enterprises leads to incorrectly inflated estimates.

Keywords: market beta; total beta; cost of equity (search for similar items in EconPapers)
JEL-codes: G31 (search for similar items in EconPapers)
Date: 2016
References: Add references at CitEc
Citations:

Downloads: (external link)
http://research.unwe.bg/uploads/ResearchPapers/Res ... _M%20Alexandrova.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nwe:natrud:y:2016:i:1:p:35-75

Access Statistics for this article

More articles in Nauchni trudove from University of National and World Economy, Sofia, Bulgaria Contact information at EDIRC.
Bibliographic data for series maintained by Vanya Lazarova ().