capital budgeting practices in indian companies

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ID: 216856
2017
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Abstract
The volatility of the global economy, changing business practices, and academic developments have created a need to re-examine Indian corporate capital budgeting practices. Our research is based on a sample of 77 Indian companies listed on the Bombay Stock Exchange. Results reveal that corporate practitioners largely follow the capital budgeting practices proposed by academic theory. Discounted cash flow techniques of net present value and internal rate of return and risk adjusted sensitivity analysis are most popular. Weighted average cost of capital as cost of capital is most favoured. Nevertheless, the theory-practice gap remains in adoption of specialised techniques of real options, modified internal rate of return (MIRR), and simulation. Non-financial criteria are also given due consideration in project selection.
Reference Key
batra2017iimbcapital Use this key to autocite in the manuscript while using SciMatic Manuscript Manager or Thesis Manager
Authors ;Roopali Batra;Satish Verma
Journal no_j_found
Year 2017
DOI
10.1016/j.iimb.2017.02.001
URL
http://www.sciencedirect.com/science/article/pii/S0970389617300587
Keywords
india risk cost of capital

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