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Research Abstracts Online
January - December 2011

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University of Minnesota Twin Cities
Curtis L. Carlson School of Management
Department of Finance

PI: Murray Z. Frank

Investment and the WACC

This project is a study of the impact of the weighted average cost of capital (WACC) on corporate investment decisions. The empirical performance of this model will be compared to the Tobin’s Q approach to modeling corporate investment. The data will be corporate investment for U.S. firms from the 1950s to 2010. As there are many firms in the data each year, and the overall dataset is fairly large, necessitating the use of MSI resources.