Features of the Project and Risk Premium in Investment Decision Making

Okulov, Vitaly L.; Khafizova, Karina R.

doi:10.21638/11701/spbu08.2018.201

Cited by 3 publications

(1 citation statement)

References 11 publications

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“…The widest group of institutions is represented by the Block of Savings Accumulationthis is a common international practice that indicates the interest of the state and business in attracting private investment to decrease the burden [10].…”

Section: Resultsmentioning

confidence: 99%

Social and investment redistribution – the trend of the future

Donchenko

Shaginyan

2021

E3S Web Conf.

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Russia is going through a stage of becoming accompanied by complex internal problems. They are associated with the development of a legal framework and reconsidering the new type of economy, the negative impact of global crises and evident challenges in the distribution of the money supply. An active social policy of the state is aimed at the population strata in need of support: pensioners, disabled people, children. But the gap between low-income and rich groups is widening, and the middle stratum as a social component has practically disappeared. This situation suggests the need to search for tools to improve the prosperity of the population. Besides, low-efficiency investment systems of large players in the sector with state participation are registered, which requires the search for additional sources of investment and ways of their rational use with proper control. Which, in its turn, will reset the load from the state budget.

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Section: Resultsmentioning

confidence: 99%

Social and investment redistribution – the trend of the future

Donchenko

Shaginyan

2021

E3S Web Conf.

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Calculation of the discount rate for the Russian market in present-day conditions

Voronov¹,

Ramenskaya

Dolzhenko

2023

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Subject. This article focuses on the consideration of the algorithm and methodological approaches to assessing the cost of capital. Objectives. The article aims to develop a practical algorithm for assessing the cost of capital and calculating the discount rate based on ruble risk-free assets and Russian financial statistics. Methods. For the study, we used the Weighted Average Capital Cost (WACC) and Capital Asset Pricing (CAPM) models. Results. The article offers a tested step-by-step algorithm for calculating the cost of capital and risk premium loading to it using domestic financial statistics. It also justifies the need to take non-systematic risks out and beyond the weighted average capital cost and offers a deterministic mechanism for their assessment. Conclusions and Relevance. The author-developed algorithm for estimating the cost of capital, as well as methodological recommendations for its use, can be used by domestic investors to make the necessary decisions, as well as by the financial services of Russian companies to build the economic policy of the company. Using the proposed approach may help obtain a more adequate assessment of the cost of capital of Russian companies for domestic investors, thereby improving their competitiveness.

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Evaluation of the cost of capital and the discount rate based on the Russian financial statistics

Voronov

Ramenskaya

2023

Journal of New Economy

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The cost of capital and the discount rate calculated on its basis are the key parameters in the financial modelling and assessment of investment projects’ economic efficiency. Therefore, the method for their evaluation is always a relevant issue for economists and financiers all over the globe. In conditions of unprecedent sanctions pressure this problem has gained special significance for Russian investors, for whom the assets denominated in ‘unfriendly’ currencies have ceased to be risk-free. The study aims to develop an algorithm for evaluating the cost of capital and calculating the discount rate based on ruble-denominated risk-free assets and Russian financial statistics. The methodological basis of the research is the theories of corporate finance and investment project design, as well as the portfolio theory. The statistics of the Russian stock market for 2003–2022 are studied using general scientific (systems analysis and synthesis) and econometric methods, as well as by adopting the Capital Asset Pricing Model (CAPM) and weighted average cost of capital (WACC). The paper suggests and tests a step-by-step algorithm for collecting and processing the Russian financial statistics to calculate the cost of capital and risk premiums to it. The findings prove that unsystematic risks should be assessed separately, rather than within the weighted average cost of capital, as well as propose a determined mechanism for this. The developed method allows avoiding the prohibitively high values of the cost of capital that arise during the use of foreign sources of information.

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Features of the Project and Risk Premium in Investment Decision Making

Cited by 3 publications

References 11 publications

Social and investment redistribution – the trend of the future

Social and investment redistribution – the trend of the future

Calculation of the discount rate for the Russian market in present-day conditions

Evaluation of the cost of capital and the discount rate based on the Russian financial statistics

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