The settlement of pension plans: turning the need into opportunity?

Neil Olympio, United-Kingdom

In this paper, we will study how the risk is modified when a company gets rid of a pension plan and will also suggest a model to leave the cost of capital of a firm virtually unaffected by a buy-out. The empirical findings in this paper tend to show that the use of the CAPM model or the use of the WACC to calculate the cost of capital does not have the same impact when it comes to neutralizing the effect of a settlement in terms of risk. With further developments, this shows that the buy-out could be an opportunity to pilot the cost of capital.
Date: 30 May - Time: 10:30 to 12:00 - Room: 252A
Theme: 9.A. Various topics