Publisher's Synopsis
Comprising in-depth interviews with the finance specialists of 18 FTSE100 firms and eight city finance specialists, this report questions whether UK companies are using payback and hurdle rates that are too high. It goes on to ask whether these high rates are biasing investment decision away from long-term projects, or acting completely rationally in raising hurdle rates to cover such factors as overoptimism and the value of embedded real options.;The report brings up a number of findings, in particular, that city analysts tend to view the cost of capital as being lower than the average corporate estimate. It also reveals a disparity of opinion regarding market risk premiums.
