Title

Variations in Valuation Methodologies and Cost of Capital: Evidence from MENA Countries.

Author's Department

Management Department

Find in your Library

http://www.worldcat.org/oclc/8048740134

All Authors

Alaa Rady; Hakim Meshreki; Ayman Ismail; Laura Núñez

Document Type

Research Article

Publication Title

Emerging Markets Finance and Trade, Taylor & Francis

Publication Date

1-1-2018

doi

10.1080/1540496X.2018.1533462

Abstract

Does the capital asset pricing model (CAPM) reflects the real risks perceived in doing business in countries in the Middle East and North Africa (MENA)? To explore this question, first, we examine whether the CAPM yields consistent results in calculating the weighted average cost of capital (WACC) as applied by different academic databases, by comparing three different academic databases for 736 listed companies on stock exchanges in the MENA region. Second, we examine whether practitioners use the WACC inputs and calculations consistent with academic databases, through an analysis of 83 companies and in-depth interviews with 8 financial institutions. We also explore adjustments made by practitioners to reflect the real risk they perceive in MENA countries.

First Page

2106

Last Page

2123

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