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| Author: | Bhattacharyya, S. Leach, J. C. |
| Title: | Risk spillovers and required returns in capital budgeting |
| Journal: | Review of Financial Studies
1999 : FALL, VOL. 12:3, p. 461-479 |
| Index terms: | Capital budgeting Strategy Products Markets Pricing Theories |
| Language: | eng |
| Abstract: | This article integrates strategic product market analysis with price-taking asset pricing theory. It is demonstrated that a firm's market power can lead to scale-dependent and potentially infinite required returns. The analysis raises important questions regarding the validity of widely used 'comparables' methods for determining risk-adjusted discount rates. |
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