Abstract
This chapter compares capital budgeting techniques employed in listed and unlisted companies. We surveyed the chief financial officers (CFOs) of 398 listed companies and 300 large unlisted companies, and based on 91 respondents, the results suggest that the CFOs of listed companies tend to use less simplistic methods more often, for example: NPV and CAPM; while CFOs of unlisted companies are less likely to estimate the cost of equity, despite being large companies. These findings indicate that stock exchange listings may require greater sophistication of the capital budgeting process.
Portions of this chapter appeared in the 2014 paper “Stock Exchange Listing Induces Sophistication of Capital Budgeting”, Revista de Administracao de Empresas, vol 54, pp560–574.
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Mendes-Da-Silva, W., Saito, R. (2019). Stock Exchange Listing and Capital Budgeting Practices. In: Mendes-Da-Silva, W. (eds) Individual Behaviors and Technologies for Financial Innovations. Springer, Cham. https://doi.org/10.1007/978-3-319-91911-9_16
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