The Cost of Capital in Japan: Recent Evidence and Further Results
Alan J. Auerbach
We extend our recent work measuring the cost of capital in Japan and the
United States by considering several questions that such results raised. Among
our findings are:
(1) The small firm - large firm distinction appears to be more
significant in Japan, not in the United States;
(2) Correcting Japanese accounting statements for cross-holding
raises the estimated Japanese cost-of-capital by about 1
(3) Correcting Japanese accounting statements for unmeasured returns
to land has a significantly more important effect: the most
conservative correction we attempt raises the implied Japanese return
to capital to parity with the United States during the mid-1980's.
In order to set up a list of libraries that you have access to,
you must first login
or sign up.
Then set up a personal list of libraries from your profile page by
clicking on your user name at the top right of any screen.