Privatization and the Corporate Cost of Capital in New Zealand: An Application of Fama and French (1999)

Fama and French’s (1999) internal rate of return method is applied to Datastream data from 1993-2001 for 81 non-financial firms listed on the New Zealand Stock Exchange. The nominal return on value is 7.09%. The real return on value is 5.07%. The nominal return on cost is 11.59%. The real return on cost is 9.48%. The 10 former state-owned enterprises have nominal and real returns significantly higher than the 71other publicly-listed companies and their capital structures and market-to-book values differ significantly. Return on corporate investment has been profitable but real and nominal compound returns and simple returns have declined over time.


Issue Date:
2005-06
Publication Type:
Journal Article
Record Identifier:
http://ageconsearch.umn.edu/record/143482
PURL Identifier:
http://purl.umn.edu/143482
Published in:
Review of Applied Economics, Volume 01, Number 1
Page range:
1-25
Total Pages:
25
JEL Codes:
G15. G32
Series Statement:
Vol.1
No.1




 Record created 2017-04-01, last modified 2018-01-22

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