This paper analyzes whether the financial distress of a firm affects the investment decisions of non-distressed competitors. On average, firms in distress impose indirect costs to non-distressed competitors by increasing costs of credit in the industry and hence restricting credit access and...

We want to assess the relationship between the equity and the debt cost of capital. Using a very simple dividend discount model we compute the implied discount rate and we compare it with the corresponding premium on the corporate credit default swap using a cointegration approach. We...

Der vorliegende Beitrag untersucht die steuerinduzierten Wirkungen der Außenfinanzierung auf den Unternehmenswert von Immobilien-Kapitalgesellschaften. Im diesem Bereich existieren neben der gewerblichen Immobilien-AG steuerbegünstigte Rechtsformen, wie die vermögensverwaltende Immobilien-AG...

Cost of capital rate is a result of risk included in cost of debt rates and cost of equity rates. Generally to estimate cost of capital rates with use of CAPM conception, is used information about general risk indicator, known as beta coefficient and relations between debt and equity rates. Such...

Even for fully equity-financed firms there may be substantial effects of taxation on the after-tax cost of capital. Among the few studies of these effects, even fewer identify all effects correctly. When marginal investment is taxed together with inframarginal, marginal beta differs from average...

This paper investigates the importance of robotics usage on firms' implied cost of equity. We find that robotics (both installations and operational stock) has significant negative explanatory power for a firm's cost of equity. More specifically, robotics contribute to firms' operating...

We outline analytically that when testing different implied cost of capital (ICC) measures for validation by employing the Vuolteenaho (2002) framework, the cash-flow news in the validation framework should be defined in a way that considers the model specific assumed sequence of future cash...

I examine whether the time-varying cost of capital is considered in firms' capital budgeting decisions. For this test, I measure the conditional cost of equity, using individual equity option prices. I find that corporate investment responds negatively to fluctuations in the option-implied cost...

This paper develops a new measure of the cost of capital, the empirical average cost of capital (EACC), which is consistent with existing methods of calculating the weighted average cost of capital but primarily uses information from the firm's financial statements and requires fewer and less...

Equity option markets can have a dual effect on firm's' cost of debt. On one hand, options attract more informed investors that increase price informativeness and reduce information asymmetries in the market, facilitating firm financing. On the other, by attracting more informed investors that...