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The use of investment decision techniques and tools in practice in a frontier market: Evidence from Ghana

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  • Nene Lartey Addico
  • Godfred Amewu
  • Anthony Owusu‐Ansah

Abstract

We apply a survey approach to investigate investment decision techniques and tools in practice among listed firms in Ghana. We find that chief financial officers (CFOs) consider the payback period the most used capital budgeting tool, which is not in line with current literature trends. For the cost of equity, the results indicate that there is low or no effort by CFOs in estimating it when calculating the cost of capital. This implies CFOs may be using the cost of debt as the cost of capital. This article provides the improvement opportunities that may support firm value maximisation in a frontier market.

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  • Nene Lartey Addico & Godfred Amewu & Anthony Owusu‐Ansah, 2022. "The use of investment decision techniques and tools in practice in a frontier market: Evidence from Ghana," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 1748-1763, September.
    • Handle: RePEc:wly:mgtdec:v:43:y:2022:i:6:p:1748-1763
    DOI: 10.1002/mde.3484
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