Why do firms use high discount rates?

• 成果类型: Article
• 署名作者: Jagannathan, Ravi; Matsa, David A.; Meier, Iwan; Tarhan, Vefa
• 署名单位: Northwestern University; National Bureau of Economic Research; Indian School of Business (ISB); Universite de Montreal; HEC Montreal; Loyola University Chicago
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2016.01.012
• 发表日期: 2016
• 页码: 445-463
• 关键词: Capital budgeting; Discount rates; cost of capital

摘要

We present evidence consistent with operational constraints leading firms to use high discount rates that average twice the firms' cost of financial capital. Based on a survey of Chief Financial Officers matched to archival data, we find that firms with abundant access to capital but limited qualified management or manpower appear to forgo profitable projects in preparation for more profitable future investment opportunities. Consistent with this explanation, firms that use high discount rates have strong balance sheets, low leverage, and large cash holdings. In addition, firms appear to increase discount rates to account for idiosyncratic risk. (C) 2016 Elsevier B.V. All rights reserved.