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JCJ-Metoden: En differentiering av Scanias WACC
Örebro University, Orebro University School of Business, Örebro University, Sweden.
Örebro University, Orebro University School of Business, Örebro University, Sweden.
2012 (Swedish)Independent thesis Advanced level (degree of Master (Two Years)), 20 credits / 30 HE creditsStudent thesis
Abstract [en]

Scania’s discount rate - the return requirement of investments - refers to Scania’s WACC or weighted average cost of capital. The capital markets return requirement on equity and the credit market interest cost of borrowing is weighted to become the single discount rate, the WACC. The purpose of this study is to investigate which asset pricing model of APT and CAPM Scania should use in their WACC calculations. The company now uses a group WACC of 11 percent which is used in all company levels. The problem with this is that investments in low-risk markets will be discounted by the same factor as high-risk markets, which can result in a misleading NPV. The objective is to create a differentiated WACC which gives an opportunity to compare investments with different risk profiles. The study proposes the best fitting model, given by evaluating APT and CAPM in a Scania context. To achieve a differentiated WACC a new method is created, The JCJ-Method. The method uses an industry index as a benchmark of Scania. The results indicate that APT is the better model for Scania in the differentiating context.

Place, publisher, year, edition, pages
2012. , 62 p.
Keyword [en]
JCJ-Method, WACC, APT, CAPM, Discount Rate, Return on Equity, Cost of Capital
National Category
Business Administration
URN: urn:nbn:se:oru:diva-23685ISRN: ORU-HHS/FEK-AS-2012/0036--SEOAI: diva2:536658
Subject / course
Social and Behavioural Science, Law
Carl-Johan Peel
Available from: 2012-10-15 Created: 2012-06-24 Last updated: 2012-10-15Bibliographically approved

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Peel, Carl-JohanRossheim, Jacob
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Orebro University School of Business, Örebro University, Sweden
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