The Choice of Tax Shieldss Discount Rate on Firm Valuation: A Case Study

2016 ◽  
Author(s):  
Ana M Lopes
Keyword(s):  
Discount Rate ◽  
Firm Valuation

Intergenerational valuation of fisheries resources can justify long-term conservation: a case study in Atlantic cod (Gadus morhua)

2005 ◽  
Vol 62 (5) ◽  
pp. 1104-1110 ◽  
Author(s):  
C H Ainsworth ◽  
U R Sumaila
Keyword(s):  
Discount Rate ◽  
Gadus Morhua ◽  
Atlantic Cod ◽  
Ecosystem Model ◽  
Conventional Model ◽  
Fisheries Resources ◽  
Optimal Harvest ◽  
Harvest Policies

Where the conventional model of discounting advocates aggressive harvest policies, intergenerational discounting could have been used to render the historic gross overfishing of Atlantic cod (Gadus morhua) economically unappealing compared with a more conservative long-term strategy. Under these discounting approaches, we compare the historic harvest trend from 1985 (and projected postcollapse earnings) with theoretical optimal harvest profiles determined by an ecosystem model. The optimal scenarios generate less initial harvest than the historic profile but maintain the resource and provide greater yields over the long term. At a discount rate equal to market interest, we demonstrate that it was more economic under conventional valuation to harvest the cod stock to collapse than it would have been to sustain the population. However, under intergenerational valuation, the sustainable optimal scenarios outperform the actual harvest profile. Application of conventional discounting by fishing consortiums may be partly to blame for depletion, yet management fell short of even that ideal.

Hotel Business Inn

2019 ◽  
Vol 9 (4) ◽  
pp. 1-15
Author(s):  
Eduardo Luis Montiel ◽  
Octavio Martinez
Keyword(s):  
Learning Outcomes ◽  
Discount Rate ◽  
Emerging Market ◽  
Weighted Average ◽  
Country Risk ◽  
Cost Of Equity ◽  
Content Type ◽  
Academic Level ◽  
The Cost

Learning outcomes These are the three most important learning outcomes: discuss the relevance of capital asset pricing model (CAPM) as the methodology to estimate the cost of equity for an investment in an emerging market; analyze the different alternatives to estimate country risk discussing the pros and cons of each. Consider the additional complexity in estimating the cost of equity, contrasting the perspective of a local, non-diversified investor with that of a multinational company operating in 39 countries. Case overview/synopsis The Chief Financial Officer of a business group has to determine the correct discount rate for an investment in a new hotel in Guayaquil, Ecuador. The group has traditionally used the same discount rate for all projects and is now presented with several alternatives by his team. Estimating the correct country risk adjustment for the project is an important challenge. He knows that there is no clear solution to this challenge that is accepted by all practitioners and academics, but he has to present a recommendation to the board. Complexity academic level The case study is designed for corporate finance, appraisal or international finance courses in both MBA and executive training programs. To discuss this case study, students are assumed to have been already exposed to the weighted average cost of capital and the CAPM. Supplementary materials Teaching Notes are available for educators only. Please contact your library to gain login details or email [email protected] to request teaching notes. Subject code CSS 1: Accounting and finance.

Capital Market Theory and Real Estate Valuation: A Case Study in Choosing an ‘Appropriate’ Discount Rate

2001 ◽  
Vol 14 (2) ◽  
pp. 119-133 ◽  
Author(s):  
A. Frank Adams ◽  
John D. Jackson ◽  
J. Philip Cook
Keyword(s):  
Real Estate ◽  
Discount Rate ◽  
Capital Market ◽  
Market Theory ◽  
Real Estate Valuation ◽  
Capital Market Theory

Abstract No abstract available.

scholarly journals Highway Project Value of Money Assessment under PPP Mode and Its Application

2018 ◽  
Vol 2018 ◽  
pp. 1-11
Author(s):  
Xiaowei Hu ◽  
Juan Han
Keyword(s):  
Discount Rate ◽  
Government Expenditure ◽  
Value Added ◽  
Highway Projects ◽  
Social Instability ◽  
Business Tax ◽  
The Government ◽  
Value Of Money ◽  
Highway Project

The application of Public-Private Partnership (PPP) mode in transportation infrastructure construction has achieved more progress worldwide; now this mode has been adopted in highway projects of China from 2015. In the application of PPP mode, there are three main facts in China, which include whether the government is responsible for land acquisition and resettlement (LAR), the discount rate changes, and the replacement of business tax by value-added tax (VAT) in 2016. So this paper discusses Value for Money (VFM) quantitative assessment of highway projects under PPP mode in China, which considers currently three actual issues in China. A case study of Heda freeway in China has shown that (1) the government’s responsibility for LAR compensation may attract social capital investor and reduce the risk of social instability, (2) a reasonable range of a low discount rate can greatly reduce government expenditure, and (3) the replacement of business tax by VAT will increase the highway project company’s burden. The research results will be helpful for value of money assessment of highway projects under PPP mode in China and may offer the reference for other countries’ highway projects under PPP mode.

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