Papers
Corporate Discount Rates
Niels Joachim Gormsen and Kilian Huber
New data on firms’ discount rates (i.e., required returns to investment). The cost of capital affects discount rates with long lags. Time-varying discount rate wedges account for low US investment in recent decades. (Slides)
Firms’ Perceived Cost of Capital
Niels Joachim Gormsen and Kilian Huber
Cross-sectional variation in firms’ perceived cost of capital systematically deviates from expected returns, challenging traditional macro-finance models. (Slides)
Climate Capitalists
Niels Joachim Gormsen, Kilian Huber, and Sangmin Oh
Green firms and divisions have used a lower cost of capital since 2016, incentivizing green investments. (Slides)
Sticky Discount Rates
Masao Fukui, Niels Joachim Gormsen and Kilian Huber – Working Paper
Nominal discount rates are sticky, a new source of monetary non-neutrality. Investment rises with expected inflation. (Slides)
A Market-Based Cost of Capital
Niels Joachim Gormsen, Kilian Huber and Theis Ingerslev Jensen – Working Paper
We estimate the cost of capital and expected cash flows of firms using a market-based approach. Market value is higher when the perceived cost of capital actually used by firms is closer to the new “market-based” cost of capital.