<p>This research develops and empirically tests a comprehensive financial framework tailored to assess the cost of capital for forestry initiatives in Chile, specifically for medium to large-scale projects (&gt; 100 hectares) with investment horizons exceeding 10&#xa0;years, focusing on not publicly traded firms. Building upon foundational theories of emerging market valuation, a revised version of the Capital Asset Pricing Model (CAPM) is utilized, integrating local and international financial data to arrive at an adjusted nominal discount rate of 9.83%. This adjustment incorporates premiums for country risk and liquidity, which are essential for accurately reflecting the dynamics of emerging markets and assets with low trading volumes. The risk-free rate is based on the average yield of 10-year US Treasury bonds, while the unlevered beta, which represents the systematic risk of a company without the effects of financial leverage, is derived from comparable companies in the forestry sector, yielding an average value of 0.61. The methodology further incorporates a thorough analysis to determine the market risk premium, calculated as the difference between the expected global return proxied by the Morgan Stanley Capital International (MSCI) All Country World Index (ACWI) and the risk-free rate, along with an additional adjustment to address the inherent illiquidity of forestry assets. Monte Carlo simulations are employed to validate the robustness of the empirical findings. The findings suggest that the adapted CAPM effectively captures both global systematic risk and the economic and structural intricacies of the Chilean context, thereby providing a reliable tool for evaluating long-term investments. This proposal enriches the academic discourse on asset valuation in emerging economies and offers practical implications for optimizing financial resource allocation in forestry projects, all while promoting sustainable development.</p>