Cost of equity of Vietnam real estate industry companies
Main Article Content
Abstract
The theoretical basis of this research is The Capital Asset Pricing Model, The Fama và French Three-factor Model, the model of Chen et al. (2011) applied to the specifics of the Real Estate industry. Using The Robust Standard Error Estimation Method, the authors research the influence of factors on the cost of equity of 70 Vietnamese real estate firms listed on the Vietnam stock market in the period 2010-2022. Results achieve: three factors of market risk premium, firm size, book-to-market equity that increase the firms' cost of equity (BH, BL, SH, SL), the factor of real estate market risk premium increases the firms' cost of equity (BL, SH, SL), the dividend factor reduces the cost of equity of SL firms. That means all four factors of market risk premium, firm size, book-to-market equity and real estate market risk premium tend to increase risks for firms and investors. Some policy implications are proposed to limit risks for Vietnamese real estate firms and investors that are to provide adequately and timely capital sources for real estate projects. The object of this study is the cost of equity of Vietnamese real estate firms, this is a new point of this study compared to previous studies in Vietnam.
Article Details
Keywords
Cost of equity, Fama and French three-factor model, Real estate industry, Real estate investment trust, Return on stocks
References
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