P1258827308bSIzH

1
Evaluation Technique
Fig. 2. Survey evidence on the popularity of
different capital budgeting methods. We report
the percentage of CFOs who always or almost
always use a particular technique. IRR represents
Internal Rate of Return, NPV is Net Present
Value, P/E is the Price to Earnings ratio, and
APV is Adjusted Present Value. The survey is
based on the responses of 392 CFOs.
2
Cost of equity capital method
Fig. 3. Survey evidence on the popularity of
different methods to calculate the cost of equity
capital. We report the percentage of CFOs who
always or almost always use a particular
technique. CAPM represents the Capital Asset
Pricing Model. The survey is based on the
responses of 392 CFOs.
3
Multibeta risks for adjusting discount rates or
cash flows
Fig. 4. Survey evidence on types of multibeta
risk that are important for adjusting cash flows
or discount rates. We report the percentage of
CFOs who always or almost always adjust for a
particular type of risk. The survey is based on
the responses of 392 CFOs.
4
Debt policy factors
Fig. 5. Survey evidence on some of the factors
that affect the decision to issue debt. The
survey is based on the responses of 392 CFOs.
5
Fig. 6. Survey evidence on whether firms have
optimal or target debt-equity ratios. The
survey is based on the responses of 392 CFOs.
6
Common stock factors
Fig. 7. Survey evidence on some of the factors
that affect the decision to issue common stock.
The survey is based on the responses of 392 CFOs.
7
Convertible debt factors
Fig. 8. Survey evidence on the factors that
affect the decision to issue convertible debt.
The survey is based on the responses of 392 CFOs.