Toward a resolution of the cost of equity conundrum in the lodging industry: a conceptual framework |
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Authors: | Melih Madanoglu Michael D Olsen |
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Institution: | Department of Hospitality and Tourism Management, Virginia Tech University, 362 Wallace Hall, Blacksburg, VA 24061-0429, USA |
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Abstract: | The firm value estimate is derived from accounting and finance practices that focus on physical assets as opposed to intangible assets (Arthur Andersen Hospitality Leisure Executive Rep. 5 (1998) 2). The cost of equity estimation models used in firm valuation and capital investment decisions fall short of tapping important constructs to firm value, especially the intangible ones. The purpose of this study is to assess the present cost of equity capital determination models and provide a view of their relevancy for the lodging industry while simultaneously attempting to propose new options to meet the valuation and capital budgeting needs of the lodging industry. |
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Keywords: | Lodging industry Firm valuation Intangibles Cost of capital |
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