Selecting Capital Projects with the Coefficient of Variation 1. Introduction

The drive to quantify risk in capital budgeting continues [10] but is still far behind the frontiers of portfolio theory. If return is payment for risk bearing, decision criteria for capital budgeting must be framed in terms of the capital market tradeoff between risk and return. They must also be s...

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Bibliographic Details
Published inFinancial management Vol. 6; no. 2; p. 65
Main Authors Osteryoung, Jerome S, Elton, Scott, Roberts, Gordon S
Format Journal Article
LanguageEnglish
Published Tampa Financial Management Association International 01.07.1977
Subjects
Capital assets
Capital budgeting
College professors
Expected values
Market prices
Project evaluation
Risk premiums
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Summary:The drive to quantify risk in capital budgeting continues [10] but is still far behind the frontiers of portfolio theory. If return is payment for risk bearing, decision criteria for capital budgeting must be framed in terms of the capital market tradeoff between risk and return. They must also be stated in intelligible terms. If a model is not clear to a manager, he may be properly reluctant to delegate responsibility...
ISSN:0046-3892
1755-053X