Practices used in cost estimation of capital of antioquian businesses.
Keywords:
Cost of capital; project evaluation; investment.Abstract
The article presents the study on the practices used for the estimate of the discount rate of the investment projects in Antioquian enterprises. The discount rate is a fundamental parameter for selection of investment projects that maximize the value of organization and contribute to materialize the strategic objectives of the company. So it is the responsibility of the executives lead the process of selection and management of projects so that will encourage a culture of previous assessment, for which the discount rate is a key factor in prioritization of investments. Within organizations, the estimate of the discount rate is in charge by financial area, is therefore that the objective of this study is to explore in the Antioquian businesses the methodology used for their estimation. To carry out this purpose were conducted surveys of a selected sample of directors of the financial areas of main companies of the sectors such as financial, health, telecommunications, energy, construction, media, drinks and food and public sector. The results showed that 65% of companies manifest to use the discount rate to evaluate their investment projects. In addition, the Weighted Average Cost of Capital (WACC) and the Capital Asset Pricing Model (CAPM) are preferred by companies with presence in Antioquia. The main contribution of this study is to inform the way how companies in Antioquia evaluate investment projects.
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