Original Research

A note on local industry asset betas for cost of capital computations

David J. Bradfield
South African Journal of Business Management | Vol 29, No 2 | a769 | DOI: https://doi.org/10.4102/sajbm.v29i2.769 | © 2018 David J. Bradfield | This work is licensed under CC Attribution 4.0
Submitted: 12 October 2018 | Published: 30 June 1998

About the author(s)

David J. Bradfield, Department of Statistical Sciences, University of Cape Town, South Africa

Full Text:

PDF (245KB)

Share this article

Bookmark and Share


Based on the premise that portfolio betas are more reliable than individual betas, it is advocated that industry asset betas rather than individual betas be used when proxies are required in cost of capital calculations. In this article local industry asset betas are empirically estimated and contrasted to US estimates. The results reveal that not all USA industry risks are translatable to the SA context and thus attempts should be made to estimate industry risks locally for cost of capital computations.


No related keywords in the metadata.


Total abstract views: 137
Total article views: 88

Crossref Citations

No related citations found.