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The use of Npv and CAPM for capital budgeting is not a good idea. A reply to De Reyck (2005)

Magni, Carlo Alberto - MASTER CONSULTORES - 2009

disequilibrium values, is at odds with arbitrage theory, and that the corresponding CAPM-based NPV rule is meaningless even in the …, leaves decision makers open to arbitrage losses, because it is an (admittedly interesting) reframing of the security market … lineand (as surprising as it might be) the use of the SML for project valuation is incompatible with the no-arbitrage …

Persistent link: https://www.econbiz.de/10010762957

The AIRR Approach for Investment Performance Measurement

Magni, Carlo Alberto - MASTER CONSULTORES - 2012

This paper introduces a new method of investment performance analysis, based on the recent approach of Average Internal Rate of Return (AIRR). We show that the approach generates rates of return suitable for assessing both a fund´s (portfolio´s) performance and a manager´s performance. The...

Persistent link: https://www.econbiz.de/10010762942

ROE, Market Value Added e creazione di valore

Magni, Carlo Alberto - MASTER CONSULTORES - 2010

Questo articolo si propone di dimostrare che il ROE (Return On Equity) ha un significato economico pregnante, al contrario di quanto sostenuto nella letteratura finanziaria e manageriale, nonché nella prassi aziendale. In particolare, un´opportuna media dei ROE è in grado di segnalare la...

Persistent link: https://www.econbiz.de/10010762950

Calculating Betas

Pareja, Ignacio Vélez - MASTER CONSULTORES - 2001

This teaching note shows the relationship between levered and unlevered betas and the general formulation for the cost of equity. It also shows, step by step, the procedure to estimate betas from data found in the stock market.It shows well known procedures for estimating betas: correlation...

Persistent link: https://www.econbiz.de/10010762963

Interval and fuzzy Average Internal Rate of Return for investment appraisal

Guerra, Maria Letizia; Magni, Carlo Alberto; Stefanini, … - MASTER CONSULTORES - 2012

In investment appraisal, uncertainty can be managed through intervals or fuzzy numbers because the arithmetical properties and the extension principle are well established and can be successfully applied in a rigorous way. We apply interval and fuzzy numbers to the Average Internal Rate of...

Persistent link: https://www.econbiz.de/10010762973

Calculating Betas (Cálculo De Betas. In Spanish)

Pareja, Ignacio Vélez - MASTER CONSULTORES - 2001

Persistent link: https://www.econbiz.de/10010763048

Constant leverage modeling: A reply to "A tutorial to the Mckinsey model for valuation of companies"

Velez-Pareja, Ignacio; Tham, Joseph - MASTER CONSULTORES - 2008

In this note we analyze the tutorial based on the McKinsey methodology for valuing companies. We have found that the McKinsey methodology has one of the most common mistakes mentioned in Tham and Vélez-Pareja (2004a and b): valuing cash flows with a constant cost of capital when the leverage is...

Persistent link: https://www.econbiz.de/10010763009

El mercado de acciones en Colombia: 1930-1998

Velez-Pareja, Ignacio - MASTER CONSULTORES - 2009

This article explores the behavior of the stock market in Colombia with the information given by the Bolsa de Bogotá Index (Indice de la Bolsa de Bogotá, IBB). The index is analyzed from January, 1930 to December, 1998. The inflation rate covers the same period; the inflation rate as measured...

Persistent link: https://www.econbiz.de/10010762969

The Colombian Stock Market: 1930-1998

Pareja, Ignacio Vélez - MASTER CONSULTORES - 1999

This article explores the behavior of the stock market in Colombia with the information given by the Bolsa de Bogota Index (Indice de la Bolsa de Bogota, IBB). The index is analyzed from January, 1930 to December, 1998. The inflation rate covers the same period; the inflation rate as measured by...

Persistent link: https://www.econbiz.de/10010827952

Cost of Equity and WACC for Perpetuities with Constant Growth

Mejia, Felipe; Pareja, Ignacio Velez - MASTER CONSULTORES - 2010

This paper shows a formulation for the cost of equity and the WACC for growing perpetuities. Some authors have derived the general expressions for those formulas but not specifically for perpetuities with constant growth. The result obtained is that a previously general formulation for a finite...

Persistent link: https://www.econbiz.de/10010827955