Unformatted text preview: inally, we "nd that "rms with
high foreign sales are more likely to use the CAPM.
Given the sharp di!erence between large and small "rms, it is important to
check whether some of these control e!ects just proxy for size. It is, indeed, the
case that foreign sales proxy for size. Table 1 shows that that there is a signi"cant correlation between percent of foreign sales and size. When we analyze the
use of the CAPM by foreign sales controlling for size, we "nd no signi"cant
di!erences. However, this is not true for some of the other co...
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- Fall '08
- Capital Asset Pricing Model, CAPM formula