An investigation of the weighted cost of capital for large American restaurant chains
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Kanghui Jiang
CoPIs:
Lei Tu, Congyi Zhang, Linjie Long
College:
College of Business and Public Management
Major:
Finance
Faculty Research Advisor(s):
Andreas Kakolyris, Tin Shan Suen
Abstract:
The recent empirical findings serve as a crucial catalyst for our exploration, emphasizing the nuanced interplay between beta values and specific risk factors, which may have previously been overlooked in traditional analyses focusing solely on the cost of capital. Our research endeavors to bridge this gap by immersing ourselves in the intricate world of standard capital structure theories, assessing their applicability within the unique context of the restaurant industry. The inclusion of four prominent American restaurant chains, each a stalwart of the S&P 500 index, adds an extra layer of significance to our study, as it allows us to draw insights from companies deeply entrenched in the heart of the market.
Our approach is characterized by rigorous scrutiny and meticulous attention to detail as we dissect the various components of capital structure theories and their implications for restaurant businesses. The poster not only presents the tangible outcomes of our investigation but also serves as a springboard for broader discussions within academic circles and practical applications within the industry. By illuminating the intricate dynamics between risk factors, beta values, and capital structure theories specific to the restaurant sector, our research offers a valuable contribution to the field of financial analysis and decision-making. It provides stakeholders with a deeper understanding of the factors driving financial performance and strategic decision-making within this dynamic and competitive market landscape.