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The Estimation of Banks’ Cost of Capital through the Capital at Risk Model: An Empirical Investigation across European Banks

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Bank Risk, Governance and Regulation

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Abstract

Valuing banks is one of the most difficult issues to deal with in corporate finance, and the enduring turmoil which has characterized the aftermath of the financial crisis of 2007 has made it even more complicated (Damodaran, 2013). All the recent academic contributions on the topic (among others: Koller et al., 2010; Damodaran, 2013; Massari et al., 2014) have highlighted that valuation of financial institutions requires an equity-side approach and, consequently, an estimation of the cost of equity instead of weighted average cost of capital.

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Authors
  1. Federico Beltrame
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  2. Daniele Previtali
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  3. Luca Grassetti
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Editor information

Editors and Affiliations

  1. Università Cattolica del Sacro Cuore, Italy

    Elena Beccalli (Professor and Visiting Professor) & Federica Poli (Associate Professor) (Professor and Visiting Professor) &  (Associate Professor)

  2. London School of Economics, UK

    Elena Beccalli (Professor and Visiting Professor) (Professor and Visiting Professor)

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© 2015 Federico Beltrame, Daniele Previtali and Luca Grassetti

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Beltrame, F., Previtali, D., Grassetti, L. (2015). The Estimation of Banks’ Cost of Capital through the Capital at Risk Model: An Empirical Investigation across European Banks. In: Beccalli, E., Poli, F. (eds) Bank Risk, Governance and Regulation. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, London. https://doi.org/10.1057/9781137530943_2

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