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

Прилагане на съвременните методи за оценка на финансовата ефективност на инвестиционни проекти в непублични предприятия
Application of Modern Methods for Assessing the Financial Performance of Investment Projects in Non-public Enterprises

Author(s): Margarita Alexandrova
Subject(s): Financial Markets
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: Market Beta; Total Beta; cost of equity.

Summary/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.

  • Issue Year: 1/2016
  • Issue No: 1
  • Page Range: 37-75
  • Page Count: 39
  • Language: Bulgarian