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dc.contributor.authorChen, Jianguoen_NZ
dc.contributor.authorWang, Ruijingen_NZ
dc.contributor.authorBlack, Carolynen_NZ
dc.date.available2011-04-07T03:19:06Z
dc.date.copyright2006-08-04en_NZ
dc.identifier.citationChen, J., Wang, R., & Black, C. (2006, August 4). The corporate cost of capital and financial investment in New Zealand. University of Otago Department of Finance Seminar Series. Presented at the University of Otago, Department of Finance, Seminar.en
dc.identifier.urihttp://hdl.handle.net/10523/1542
dc.description.abstractWe have estimated the cost of capital for the New Zealand listed non-finance corporate sector by the corporate internal rate of return method adopted by Fama and French (1999). The real IRR on value is 1.87% and IRR on cost is 4.38%. An industry analysis revealed large differences in returns, with five out of six industry sectors achieving positive nominal and real IRRs. The cash flows component analysis reveals that on average, New Zealand firms generated income equal to 4.93% of beginning of year book value, which is much less than the comparable US rate of 8.83% (Fama and French, 1999). Mirroring this income difference, the issuance of equity by New Zealand companies equal to 5.57% of the beginning book value, greatly exceeded the US rate of 0.81% (Fama and French, 1999). Although New Zealand firms tend to place more reliance on equity issues to finance their total investment requirements, debt issues are also often used.en_NZ
dc.format.mimetypeapplication/pdf
dc.relation.ispartofUniversity of Otago Department of Finance Seminar Seriesen_NZ
dc.relation.urihttp://www.business.otago.ac.nz/finc/research/seminars_06.htmlen_NZ
dc.subjectCost of Capital; Internal Rate of Return; New Zealand Market; Corporate Finance; Cash Flows.en_NZ
dc.subject.lcshHF Commerceen_NZ
dc.subject.lcshHF5601 Accountingen_NZ
dc.subject.lcshHG Financeen_NZ
dc.titleThe corporate cost of capital and financial investment in New Zealanden_NZ
dc.typeConference or Workshop Item (Seminar, Speech or Other Presentation)en_NZ
dc.description.versionUnpublisheden_NZ
otago.bitstream.pages39en_NZ
otago.date.accession2007-04-12en_NZ
otago.schoolFinanceen_NZ
otago.openaccessOpen
otago.place.publicationDunedin, New Zealanden_NZ
dc.identifier.eprints611en_NZ
dc.description.refereedNon Peer Revieweden_NZ
otago.school.eprintsFinance & Quantitative Analysisen_NZ
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otago.event.dates4 August 2006en_NZ
otago.event.placeCommerce 5.37, University of Otago, Dunedin, Otagoen_NZ
otago.event.typeotheren_NZ
otago.event.titleUniversity of Otago, Department of Finance, Seminaren_NZ
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