Testing the Damodaran Approach to Estimate the Cost of Equity in Emerging Markets
Authors
Keywords
cost of equity, SMAPE, the Damodaran approach
The cost of equity is one of the key financial and economic indicators in corporate finance. The purpose of this paper is to test the well-known approach of Damodaran in global emerging markets. The main result of the study is that the Damodaran approach needs to be improved as it maintains constant deviation from the observed ex-post cost of equity.
JEL: G11, G32, C52Pages: 14
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