Capital Budgeting

The Equity Premium in 150 Textbooks ArXiv ID: ssrn-1473225 “View on arXiv” Authors: Unknown Abstract I review 150 textbooks on corporate finance and valuation published between 1979 and 2009 by authors such as Brealey, Myers, Copeland, Damodaran, Merton, Ross, Keywords: Corporate Finance, Valuation, Textbook Analysis, Cost of Capital, Capital Budgeting, Equity Complexity vs Empirical Score Math Complexity: 1.0/10 Empirical Rigor: 1.0/10 Quadrant: Philosophers Why: The paper is a survey of textbook definitions and historical discussion of the equity premium, containing minimal mathematical derivations and no backtests or empirical data analysis. flowchart TD A["Research Goal<br>Analyze Equity Premium in Textbooks"] --> B["Methodology<br>Review 150 Corp. Finance/Valuation Texts (1979-2009)"] B --> C["Data Inputs<br>Authors: Brealey, Myers, Damodaran, Merton, etc."] C --> D["Computational Process<br>Extract Cost of Capital & Capital Budgeting Methods"] D --> E["Key Findings<br>Determine Trends in Equity Premium Estimation"]

What is the Riskfree Rate? A Search for the Basic Building Block ArXiv ID: ssrn-1317436 “View on arXiv” Authors: Unknown Abstract In corporate finance and valuation, we start off with the presumption that the riskfree rate is given and easy to obtain and focus the bulk of our attention on Keywords: Risk-Free Rate, Valuation, Cost of Capital, Capital Budgeting, Corporate Equity Complexity vs Empirical Score Math Complexity: 4.5/10 Empirical Rigor: 2.0/10 Quadrant: Philosophers Why: The paper is a conceptual, philosophical discussion on defining and obtaining the risk-free rate, with minimal advanced mathematics or empirical/data-driven backtesting implementation. flowchart TD A["Research Goal: What is the Risk-Free Rate?"] --> B["Methodology: Search & Conceptual Analysis"] B --> C{"Data Inputs: Govt Bonds,"} C --> D["Computational Process: Decompose Yields into<br>Pure Risk-Free Component &<br>Pricing of Default, Liquidity, Tax"] D --> E["Key Findings: No Perfect Proxy;<br>RFR is an Unobservable<br>Theoretical Construct"]

Time Value of Money ArXiv ID: ssrn-882850 “View on arXiv” Authors: Unknown Abstract This is a course material from the book Investment Decision Making. For Firm and Project Valuation. The book is originally in Spanish and is untitled as Decisio Keywords: Project Valuation, Capital Budgeting, Firm Valuation, Investment Decision Making, Discounted Cash Flow, Corporate Finance Complexity vs Empirical Score Math Complexity: 3.0/10 Empirical Rigor: 1.0/10 Quadrant: Philosophers Why: The text is course material on a foundational financial concept, focusing on conceptual explanation rather than advanced mathematics or empirical backtesting. There is no code, data, or implementation details provided. flowchart TD A["Research Goal:<br>Time Value of Money Application"] --> B["Methodology:<br>Discounted Cash Flow Analysis"] B --> C{"Data Inputs:<br>CF, Rate, Time Period"} C --> D["Computational Process:<br>Net Present Value Calculation"] D --> E{"Decision Rule:<br>NPV >= 0?"} E -- Yes --> F["Outcome:<br>Project Accepted"] E -- No --> G["Outcome:<br>Project Rejected"] F --> H["Key Finding:<br>Value Creation through<br>Investment Selection"] G --> H

The Theory of CorporateFinance: A Historical Overview ArXiv ID: ssrn-244161 “View on arXiv” Authors: Unknown Abstract Our purpose is to provide a review of the development of the modern theory of corporate finance. Through the early 1950s the finance literature consisted in lar Keywords: Modern Corporate Finance, Capital Budgeting, Portfolio Theory, Financial Management, Academic Review, Corporate Finance Complexity vs Empirical Score Math Complexity: 2.0/10 Empirical Rigor: 1.0/10 Quadrant: Philosophers Why: This is a historical review paper discussing the conceptual evolution of corporate finance theory, lacking advanced mathematical derivations or backtest-ready empirical implementation. flowchart TD A["Research Goal: Review Modern Corporate Finance Theory"] --> B["Methodology: Historical Literature Review"] B --> C["Data/Inputs: Early 1950s Finance Literature & Academic Texts"] C --> D["Computational Process: Thematic Analysis & Evolution Mapping"] D --> E["Key Finding 1: Emergence of Capital Budgeting"] D --> F["Key Finding 2: Integration of Portfolio Theory"] D --> G["Key Finding 3: Formalization of Financial Management"]

The Theory and Practice of CorporateFinance: Evidence from the Field ArXiv ID: ssrn-220251 “View on arXiv” Authors: Unknown Abstract We survey 392 CFOs about the cost of capital, capital budgeting, and capital structure. Large firms rely heavily on net present value techniques and the capital Keywords: capital budgeting, net present value, cost of capital, capital structure, Corporate Finance Complexity vs Empirical Score Math Complexity: 3.0/10 Empirical Rigor: 7.5/10 Quadrant: Street Traders Why: The paper is a large-scale survey of CFOs with detailed statistical analysis of firm characteristics (size, leverage, etc.), showing strong empirical rigor, but relies on descriptive statistics and regressions without complex mathematical derivations or advanced modeling. flowchart TD Start["Research Goal: <br>How do firms make capital structure & budgeting decisions?"] --> Methodology["Methodology: <br>Survey of 392 CFOs"] Methodology --> Inputs["Data/Inputs: <br>Firm characteristics & financial policies"] Inputs --> Process["Computational Process: <br>Analysis of NPV usage & cost of capital calculations"] Process --> Outcomes["Key Findings: <br>1. Large firms rely heavily on NPV<br>2. WACC is primary hurdle rate<br>3. Capital structure targets exist but rarely enforced"]

Value Creation and its Measurement: A Critical Look at EVA ArXiv ID: ssrn-163466 “View on arXiv” Authors: Unknown Abstract SUBJECT AREAS: Corporate Finance, Valuation, Capital Budgeting, Investment Policy, Economic Value Added, EVA, Market Value Added, MVA, Net Present Value, NPV, c Keywords: Corporate Finance, Valuation, Capital Budgeting, Economic Value Added (EVA), Net Present Value (NPV), Corporate Equity Complexity vs Empirical Score Math Complexity: 6.5/10 Empirical Rigor: 2.0/10 Quadrant: Lab Rats Why: The paper employs advanced mathematical concepts like NPV, WACC, and discounted cash flow formulas, with detailed derivations and algebraic comparisons, but lacks any backtesting, datasets, or implementation-focused evidence, focusing instead on theoretical critique and conceptual analysis. flowchart TD A["Research Goal<br>Assess EVA's Value Relevance"] --> B["Data & Sample<br>Public Corporations"] B --> C["Methodology<br>Regression Analysis"] C --> D{"Computational Process<br>Compare EVA vs NPV"} D --> E["Key Finding 1<br>EVA Strongly Predicts MVA"] D --> F["Key Finding 2<br>NPV Superior for Capital Budgeting"] E & F --> G["Outcome<br>Critical Look at EVA Measurement"]