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| Author: | Fischer, E. O. |
| Title: | Die relevanten Kalkulationszinsfüsse in der Investitions- planung |
| Journal: | Zeitschrift für Betriebswirtschaft
1999 : VOL. 69:7, p. 777-801 |
| Index terms: | DISCOUNT RATE CAPITAL BUDGETING CAPITAL ASSET PRICING |
| Language: | ger |
| Abstract: | This paper focuses on the different risk adjusted discount rates that have to be used in the most popular methods for calculating the net present values in capital budgeting: the flow to equity method, the weighted average cost of capital method and the adjusted present value method. It is shown that these discount rates depend on the financial leverage, the operating leverage and on the cyclicality of future re- venues of the firm. Based on the capital asset pricing model we furthermore determine the relevant risk premium for each discount rate. |
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