Comment on: Time-varying risk premia and the cost of capital: an alternative implication of the Q theory of investment

2002 ◽  
Vol 49 (1) ◽  
pp. 67-74 ◽  
Author(s):  
Janice C. Eberly
Keyword(s):  
Cost Of Capital ◽  
Risk Premia ◽  
Time Varying ◽  
Q Theory ◽  
The Cost

Public Information and Efficient Capital Investments: Implications for the Cost of Capital and Firm Values

2019 ◽  
Vol 95 (5) ◽  
pp. 57-93
Author(s):  
Peter O. Christensen ◽  
Hans Frimor
Keyword(s):  
Asset Pricing ◽  
Interest Rates ◽  
Capital Market ◽  
Cost Of Capital ◽  
Public Information ◽  
Risk Premia ◽  
Capital Investments ◽  
Market Outcomes ◽  
Economics Model ◽  
The Cost

ABSTRACT In a standard financial economics model of asset pricing and value-maximizing firms, we show that better public information about firm-specific and economy-wide events affects the allocation of capital investments among firms and over time. The consequences for capital market outcomes, such as risk, risk premia, interest rates, firm prices, and the cost of capital, depend on investor preferences and whether improvements are to firm-specific or economy-wide information. We show that interest rates and risk premia tend to move in opposite directions and that the effects on interest rates often dominate the effects on risk premia in determining firm values and the cost of capital.

An Introduction to the Cost of Capital

2010 ◽  
Author(s):  
Ignacio Velez-Pareja ◽  
Joseph Tham
Keyword(s):  
Cost Of Capital ◽  
The Cost

Institutional Investors, Private Information, and the Cost of Capital

2011 ◽  
Author(s):  
Huong Giang (Lily) Nguyen ◽  
Xiangkang Yin ◽  
Luong Hoang Luong
Keyword(s):  
Private Information ◽  
Institutional Investors ◽  
Cost Of Capital ◽  
The Cost
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