search query: @indexterm rationality / total: 141
reference: 99 / 141
| Author: | Stein, J. |
| Title: | Rational capital budgeting in an irrational world |
| Journal: | Journal of Business
1996 : OCT, VOL. 69:4, p. 429-456 |
| Index terms: | RATIONALITY CAPITAL BUDGETING RESEARCH |
| Language: | eng |
| Abstract: | This article addresses the following basic capital budgeting problem: suppose that cross-sectional differences in stock returns can be predicted based on variables other than beta (e.g., book-to-market) and that this predictability reflects market irrationality rather than compensation for fundamental risk. In this setting, how should companies determine hurdle rates? The authors shows how factors such as managerial time horizons and financial constraints affect the optimal hurdle rate. |
SCIMA