Capital Budgeting Use In Canada: Sophistication And Risk Attributes

Abstract

This study uses a sample of 80 of the 1989 financial Posts Top 500 Canadian Corporations to test for correlation between the selection of capital budgeting techniques and three variables measuring the degree of environmental uncertainty: (1) firms systematic risk (i.e., firms beta), (2) industrys systematic risk (i.e., industry beta), and (3) managements self assessment of its corporate risk.