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The use of capital budgeting and cost of capital estimation methods in Swedish listed companies
Uppsala universitet.ORCID iD: 0000-0002-5043-6289
2012 (English)In: Journal of Applied Business Research, E-ISSN 2157-8834, Vol. 28, no 6, 1451-1476 p.Article in journal (Refereed) Published
Abstract [en]

In this paper Swedish listed companies’ use of capital budgeting and cost of capital estimation methods in 2005 and 2008 are examined. The relation between company characteristics and choice of methods is investigated and both within-country longitudinal and cross-country comparisons are made. Larger companies seem to have used capital budgeting methods more frequently than smaller companies. When compared to U.S. and continental European companies, Swedish listed companies employed capital budgeting methods less frequently. In 2005 the most common method for establishing the cost of equity was by asking the investors what return they required. By 2008 CAPM was instead the most utilised method, which could indicate greater sophistication. The use of project risk when evaluating investments also seems to have gained in popularity, while the use of company risk declined. Overall, the use of sophisticated capital budgeting and cost of capital estimation methods seem to be rising and the use of less sophisticated methods declining.

Place, publisher, year, edition, pages
The Clute Institute , 2012. Vol. 28, no 6, 1451-1476 p.
National Category
Business Administration
Research subject
Complex Systems – Microdata Analysis
Identifiers
URN: urn:nbn:se:du-12073OAI: oai:DiVA.org:du-12073DiVA: diva2:613388
Available from: 2013-03-27 Created: 2013-03-27 Last updated: 2017-12-06Bibliographically approved
In thesis
1. Four Papers on Top Management´s Capital Budgeting and Accounting Choices in Practice
Open this publication in new window or tab >>Four Papers on Top Management´s Capital Budgeting and Accounting Choices in Practice
2012 (English)Doctoral thesis, comprehensive summary (Other academic)
Place, publisher, year, edition, pages
Uppsala: Uppsala universitet, 2012. 43 p.
Series
Doctoral thesis / Företagsekonomiska institutionen, Uppsala universitet, ISSN 1103-8454 ; 153
Keyword
Capital budgeting method, cost of capital estimation, accounting choice, goodwill, disclosure compliance
National Category
Business Administration
Identifiers
urn:nbn:se:du-12551 (URN)
Public defence
2012-10-03, Hörsal 2, Kyrkogårdsgatan 10, 753 13 UPPSALA, Uppsala, 16:53 (Swedish)
Opponent
Supervisors
Available from: 2013-05-31 Created: 2013-05-24 Last updated: 2016-02-02Bibliographically approved

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http://journals.cluteonline.com/index.php/JABR/article/view/7354/7422

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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf