A consistent value of cost of debt is necessary to havea congruous weighted average cost of capital to use in evaluation processes. Nevertheless in literature there is a lack about the estimation of cost of debt in unlisted companies. After a review of methods used to compute cost of debt in listed companies we have elaborated a new model for unlisted companies, according to common features of the researches. Our model is based on alogit regression in which dependent variable is the rating assigned by Standard and Poor’s and independent variables are taken from the main approaches in literature. We find that this algorithm has a good predictive performances and in particular some independent variables, such as the rating of country where enterprise operates, have an higher statistical significance.

The Cost of Debt in Unlisted Companies

MICHELI, Anna Paola;DI NALLO, Loris
2016

Abstract

A consistent value of cost of debt is necessary to havea congruous weighted average cost of capital to use in evaluation processes. Nevertheless in literature there is a lack about the estimation of cost of debt in unlisted companies. After a review of methods used to compute cost of debt in listed companies we have elaborated a new model for unlisted companies, according to common features of the researches. Our model is based on alogit regression in which dependent variable is the rating assigned by Standard and Poor’s and independent variables are taken from the main approaches in literature. We find that this algorithm has a good predictive performances and in particular some independent variables, such as the rating of country where enterprise operates, have an higher statistical significance.
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Utilizza questo identificativo per citare o creare un link a questo documento: http://hdl.handle.net/11580/61624
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