A research carried out by FINLAB, Laboratory of Corporate Finance at the University of Cassino and Southern Lazio indeed revealed that analysts and consultants, for discounting the cash flows, used for non-listed companies, measures of the cost of equity calculated using the CAPM.This causes errors in the evaluations considered that the opportunity cost of capital thus calculated is undervalued respect to the risk.The model suggested in this paper, however, is reserved just to unlisted companies.Based on the assumption that in the absence of diversification the expected return must be commensurate with the specific risk as well as the systematic risk. The model consists of an algorithm that can estimate the cost of capital of an enterprise based on the multiple regression model , with a set of independent variables specially selected by the stepwise analysis.
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