Private Cost of the Capital Model (PCOC)

Dariusz Zarzecki

Published : 2015-02-28

Vol. 58 No. 1 (2015)

Private Cost of the Capital Model (PCOC)

Dariusz Zarzecki

Abstract

In this paper, the Capital Asset Pricing Model (CAPM) and the Arbitrage Pricing Model (APM), i.e. the most widely used models of estimating cost of equity, are presented. In addition, a new model of calculating the private cost of capital is introduced. This model is the Private Cost of Capital Model (PCOC) - a new concept based on the Pepperdine PCOC survey project which was launched in 2007 by J.K. Paglia. It may be worthwhile to conduct a similar survey among private companies in Poland, and other countries, to get direct estimates of the private cost of capital.(original abstract)

Keywords:

Enterprise valuation, Capital cost, Ownership capital, Private enterprise

Most read articles by the same author(s)

Dariusz Zarzecki, Estimating the International Cost of Equity Capital , Zeszyty Naukowe Wyższej Szkoły Bankowej w Poznaniu: Vol. 47 No. 2 (2013)

<< < 1 2

Details

References

Statistics

Authors

Download files

PDF (Język Polski)

Citation rules

Zarzecki, D. (2015). Private Cost of the Capital Model (PCOC). Zeszyty Naukowe Wyższej Szkoły Bankowej W Poznaniu, 58(1). Retrieved from https://journals.wsb.poznan.pl/index.php/znwsb/article/view/1025

Altmetric indicators

Cited by / Share

References

Berry M.A., Burmeister E., McElroy M.B., Sorting Out Risks Using Known APT Factors, "Financial Analysts Journal" 1988, March-April.

Chen N.F., Roll R., Ross S.A., Economic Forces and the Stock Market, "Journal of Business" 1986, No. 59.

Damodaran A., Cost of Capital by Sector, NYU Stern School of Business, 2010, http://pages.stern. nyu.edu/~adamodar/New_Home_Page/datafile/wacc.htm [9.09.2011].

Fernandez P., CAPM: an absurd model, http://ssrn.com/abstract=2505597 [18.11.2014].

Grinblatt M., Titman S., Financial Markets and Corporate Strategy, McGraw-Hill, Boston 1998.

Harjoto M.A., Paglia J.K., Cost of Capital and Capital Budgeting for Privately-Held Firms: Evidence from Business Owners Survey, "Journal of Accounting and Finance" 2012, Vol. 12(5).

Haugen R.A., Modern Investment Theory, Prentice-Hall, Englewood Cliffs 1993.

Ibbotson Cost of Capital 2009 Yearbook, Morningstar, Chicago 2009.

Kaen F.R., Corporate Finance, Blackwell, Cambridge, Mass. 1995.

Siegel J.J., The Application of the DCF Methodology for Determining the Cost of Equity Capital, "Financial Management" 1985, Vol. 14, No. 1.

Slee R., J.K. Paglia, Private Cost of Equity Capital Model, "The Value Examiner. A Professional Development Journal for the Consulting Disciplines" 2010, March-April.

Trugman G.R., Understanding Business Valuation. A Practical Guide to Valuing Small and Medium Sized Businesses, AICPA, New York 2012.

Zarzecki D., Metody wyceny przedsiębiorstw, Fundacja Rozwoju Rachunkowości w Polsce, Warszawa 1999.

Zarzecki D., Użyteczność metody składania w szacowaniu kosztu kapitału własnego, "Przegląd Organizacji" 2010, No. 2.

Zmiany strukturalne grup podmiotów gospodarki narodowej w rejestrze Regon, I półrocze 2013, GUS, Warszawa 2013.

Zyla M.L., Fair Value Measurement. Practical Guidance and Implementation, John Wiley & Sons, Hoboken 2013.