Artikel
A Note on Estimating the Cost of Capital for the Undiversified Business Owner
About 70 percent of businesses are organized as sole proprietorships, and many business owners are not well-diversified, yet the finance discipline is largely silent regarding how to estimate the opportunity cost of capital for undiversified investors. In this paper, the Capital Market Line (CML) is presented as the appropriate vehicle for estimating such an investor’s return requirement. Recognizing the applicability of the CML allows the undiversified investor’s exposure to an investment’s total risk to be objectively linked to the market price of risk. Knowing the appropriate return requirement is useful for valuation and capital budgeting purposes.
- Sprache
-
Englisch
- Erschienen in
-
Journal: Journal of Small Business Finance ; ISSN: 1057-2287 ; Volume: 4 ; Year: 1995 ; Issue: 2/3 ; Pages: 191-196 ; Greenwich, CT: JAI Press
- Klassifikation
-
Management
Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
New Firms; Startups
- Thema
-
Cost of Capital
Entrepreneur
Small Business
Undiversified
Diversification
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Hickman, Kent A.
Barnes, Clarence
Byrd, John
- Ereignis
-
Veröffentlichung
- (wer)
-
JAI Press
- (wo)
-
Greenwich, CT
- (wann)
-
1995
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:42 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Artikel
Beteiligte
- Hickman, Kent A.
- Barnes, Clarence
- Byrd, John
- JAI Press
Entstanden
- 1995
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