Cost of Equity Estimation in REIT Valuation in Emerging Europe: The Case of Bulgaria

18 Pages Posted: 29 Jan 2015

See all articles by Peter Chuknyisky

Peter Chuknyisky

International Enterprise Development, Inc. (IED)

Violeta Kasarova

New Bulgarian University

Nigokhos Krikorov Kanaryan

New Bulgarian University

Date Written: January 27, 2015

Abstract

We propose a model, which is a modification of the Salomon Smith Barney model for cost of capital determination. The model reflects the following characteristics: (1) the degree of diversification of the particular investor (imperfectly diversified); (2) the systematic country risk; (3) firm specific risks; and (4) time varying risk nature. The inputs of the model have as a source only publicly available data. An illustration of the proposed model is the case of U.S. investor who considers an investment in the most traded Bulgarian REITs.

Keywords: Real estate valuation; Emerging markets; Cost of equity

JEL Classification: R10, G10, G12

Suggested Citation

Chuknyisky, Peter and Kasarova, Violeta and Kanaryan, Nigokhos Krikorov, Cost of Equity Estimation in REIT Valuation in Emerging Europe: The Case of Bulgaria (January 27, 2015). Available at SSRN: https://ssrn.com/abstract=2556394 or http://dx.doi.org/10.2139/ssrn.2556394

Peter Chuknyisky

International Enterprise Development, Inc. (IED) ( email )

6260 N. Ocean Blvd.
Ocean Ridge, FL
United States

Violeta Kasarova

New Bulgarian University ( email )

21 Montevideo Str.
Sofia, 1618
Bulgaria

Nigokhos Krikorov Kanaryan (Contact Author)

New Bulgarian University ( email )

21 Montevideo Str.
Sofia, 1618
Bulgaria

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