Adjustment by size effect on the cost of equity: Pending practice in capital budget in Colombia
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| Formato: | Artículo científico |
| Lenguaje: | en |
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Universidad del Valle
2020
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| _version_ | 1876467209195225088 |
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| author | Walther Reina Gutiérrez |
| author_facet | Walther Reina Gutiérrez |
| contents | Adjustment by size effect on the cost of equity: Pending practice in capital budget in Colombia Walther Reina Gutiérrez Jenny Moscoso Escobar Carolina Montoya González Administración y Contabilidad CAPM effect Cost of equity Premium or size Cost of capital This research identifies and analyzes the implications of capital budgeting techniques implemented by large, medium and small companies, related to the use and calculation of the discount rate - emphasizing in the cost of equity, adjusting it with a size premium and the calculation method of the latter- differentiating between the procedure of family and non-family businesses and the types of projects. Additionally, the same procedure is used for the viability indicators of the projects given their relevance in capital budget. For this, a descriptive analysis accompanied by contingency tables is made to a group of 182 Colombian companies. The results show that (i) only 14% of SMEs that evaluate their projects (93) adjust the discount rate with a size premium, (ii) procedures to define capital budget are more informal in family companies, (iii) expansion and replacement projects are more evaluated by family businesses, while mergers and acquisitions are more evaluated by non-family businesses, and (iv) there is little transfer of knowledge from the academy to the company. 2020 artículo científico 0120-4645 https://www.redalyc.org/articulo.oa?id=225068662010 https://www.redalyc.org/journal/2250/225068662010/ https://www.redalyc.org/journal/2250/225068662010/html/ https://www.redalyc.org/journal/2250/225068662010/225068662010.epub https://www.redalyc.org/journal/2250/225068662010/movil 10.25100/cdea.v36i67.7896 en http://www.redalyc.org/revista.oa?id=2250 Cuadernos de Administración application/pdf Universidad del Valle Cuadernos de Administración (Colombia) Num.67 Vol.36 |
| format | Artículo científico |
| id | redalyc_225068662010 |
| institution | Redalyc |
| language | en |
| publishDate | 2020 |
| publisher | Universidad del Valle |
| spellingShingle | Adjustment by size effect on the cost of equity: Pending practice in capital budget in Colombia Walther Reina Gutiérrez Administración y Contabilidad CAPM effect Cost of equity Premium or size Cost of capital Adjustment by size effect on the cost of equity: Pending practice in capital budget in Colombia Walther Reina Gutiérrez Jenny Moscoso Escobar Carolina Montoya González Administración y Contabilidad CAPM effect Cost of equity Premium or size Cost of capital This research identifies and analyzes the implications of capital budgeting techniques implemented by large, medium and small companies, related to the use and calculation of the discount rate - emphasizing in the cost of equity, adjusting it with a size premium and the calculation method of the latter- differentiating between the procedure of family and non-family businesses and the types of projects. Additionally, the same procedure is used for the viability indicators of the projects given their relevance in capital budget. For this, a descriptive analysis accompanied by contingency tables is made to a group of 182 Colombian companies. The results show that (i) only 14% of SMEs that evaluate their projects (93) adjust the discount rate with a size premium, (ii) procedures to define capital budget are more informal in family companies, (iii) expansion and replacement projects are more evaluated by family businesses, while mergers and acquisitions are more evaluated by non-family businesses, and (iv) there is little transfer of knowledge from the academy to the company. 2020 artículo científico 0120-4645 https://www.redalyc.org/articulo.oa?id=225068662010 https://www.redalyc.org/journal/2250/225068662010/ https://www.redalyc.org/journal/2250/225068662010/html/ https://www.redalyc.org/journal/2250/225068662010/225068662010.epub https://www.redalyc.org/journal/2250/225068662010/movil 10.25100/cdea.v36i67.7896 en http://www.redalyc.org/revista.oa?id=2250 Cuadernos de Administración application/pdf Universidad del Valle Cuadernos de Administración (Colombia) Num.67 Vol.36 |
| title | Adjustment by size effect on the cost of equity: Pending practice in capital budget in Colombia |
| topic | Administración y Contabilidad CAPM effect Cost of equity Premium or size Cost of capital |
| url | https://www.redalyc.org/articulo.oa?id=225068662010 https://www.redalyc.org/journal/2250/225068662010/ https://www.redalyc.org/journal/2250/225068662010/html/ https://www.redalyc.org/journal/2250/225068662010/225068662010.epub https://www.redalyc.org/journal/2250/225068662010/movil |