Risk and Investment in the Global Telecommunications Industry
Irene Henriques (York University, Canada) and Perry Sadorsky (York University, Canada)
Copyright © 2008.
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In this chapter, quantitative modeling and simulation techniques are used to estimate various risk measures and the associated cost of equity for the global telecommunications industry. Our approach is to calculate several different cost-of-equity values and then use simulation techniques to build up a probability distribution for each company’s cost of equity. In this way, a clearer picture of where a company’s cost of equity lies is developed. Closing the Digital Divide could bring many benefits to developing countries but international investors and development planners must be able to make their own cost-of-equity calculations so that they can see first hand how their investment projects compare with other investment projects around the globe.