naa a22 4500 510735770 CHVBK 20180411083009.0 cr unu---uuuuu 180411e20131201xx s 000 0 eng 10.1007/s11573-013-0687-z doi (NATIONALLICENCE)springer-10.1007/s11573-013-0687-z Corporate valuation using imprecise cost of capital [Elektronische Daten] [Simon Elsner, Hans-Christian Krumholz] If the estimated cost of capital bears a standard error, the estimation remains imprecise and firm values are biased on average, even though the estimator of the cost of capital is unbiased. Literature contributes approaches using adjusted discount factors to correct for such biases. This paper examines the theoretical and practical problems arising from the use of these approaches which are most likely to occur in the context of terminal value estimation. The adjusted discount factors imply time-dependent discount rates. Therefore, the commonly used valuation formula for perpetuities (Gordon formula) is no longer suitable to estimate unbiased terminal values. To continue application of this formula, this paper derives a new formula to directly adjust the cost of capital for estimation errors which yields unbiased terminal values. Springer-Verlag Berlin Heidelberg, 2013 Corporate valuation nationallicence Cost of capital nationallicence Discount factors nationallicence Estimation bias nationallicence Parameter uncertainty nationallicence Elsner Simon Ulm University, Ulm, Germany aut Krumholz Hans-Christian Ulm University, Ulm, Germany aut Journal of Business Economics Springer Berlin Heidelberg 83/9(2013-12-01), 985-1014 0044-2372 83:9<985 2013 83 11573 https://doi.org/10.1007/s11573-013-0687-z text/html Onlinezugriff via DOI 1 research-article jats NATIONALLICENCE 856 40 https://doi.org/10.1007/s11573-013-0687-z text/html Onlinezugriff via DOI NATIONALLICENCE 700 1- Elsner Simon Ulm University, Ulm, Germany aut NATIONALLICENCE 700 1- Krumholz Hans-Christian Ulm University, Ulm, Germany aut NATIONALLICENCE 773 0- Journal of Business Economics Springer Berlin Heidelberg 83/9(2013-12-01), 985-1014 0044-2372 83:9<985 2013 83 11573 Metadata rights reserved Springer special CC-BY-NC licence nationallicence BK010053 XK010053 XK010000 NATIONALLICENCE NATIONALLICENCE NL-springer