Comparing CAPM and Capital Budgeting Approaches to Evaluating Forestry Investments
Investigators:
Frederick W. Cubbage, North Carolina State University
John Wagner, State University of New York at Syracuse
Clair H. Redmond, USDA-Forest Service
David N. Wear, Southern Research Station
Description:
Capital budgeting (CB) and the Capital Asset Pricing Model are the two principal tools for evaluating
the financial performance of forestry investments. In this study we compare the performance of the
two approaches for various investment alternatives and compare their relative merits. The two models
have separate strengths and this research indicates that investment gains could be achieved by using
both in concert.
Problem Area(s):
Timber investment
Status:
Completed
Products:
Wagner, John E., Frederick W. Cubbage, and Clair H. Redmond. 1995. Comparing the capital asset
pricing model and capital budgeting techniques to analyze timber investments. Forest Products Journal
45(7/8):69-77.
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modified:
13-MAR-2000
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USDA FS SRS
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