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  1. Why is CAPM used to estimate Cost of Equity when Beta only measures systematic risk?

    Am I overlooking something? If Beta measures only systematic risk (therefore assuming that all firm-specific risk can be diversified away), then why is the CAPM model used to estimate cost of equity? Isn't it a little misleading because some firms ...

    - May 30 2015 - 12:23pm - 12 comments

  2. What is the accurate market risk premium to use currently? (for the CAPM formula for example)

    10 year treasury is at 2.25%. What is the market premium that you are using? CAPM ...

    - Mar 8 2015 - 12:18pm - 5 comments

  3. Notes for Technical Interview Questions

    During a recent round of interviews with several banks, headhunters sent across a number of potential technical questions that they said I should be very comfortable with. However, through all of my interviews I was never actually asked any technical ...

    - Jan 9 2014 - 9:00pm - 40 comments

  4. CAPM- Cost of Debt

    Hello, I am currently in the middle of completing my Masters in corporate finance, and have come to a slight "roadblock" in terms of my Company valuation. In terms of background context, I am currently valuing a company on its 2004 IPO listing ...

    - May 4 2014 - 5:19pm - 15 comments

  5. Breaking Into RE- CCIM/Argus/etc

    So, long time lurker here. Short story, I'm 8 months or so out from leaving the military(August) and entering my last semester of B-school(IU Kelley Direct). Obviously not a target school, but still decent, and with ugrad in History from a midsize ...

    - Nov 13 2014 - 1:19pm - 5 comments

  6. Finance Hipsters

    Morning Monkeys! I'd like to take a moment to discuss the growing multitude of "finance hipsters" and why they annoy the crap out of me. No, I'm not talking about hipsters who happen to work in finance, I'm talking about all these ...

    - Nov 18 2012 - 6:38am - 28 comments

  7. What kind of WACC do you usually get?

    Hi everyone. I am doing stock valuations for my own investment portfolio, but what is bothering me is the WACC calculation. I red Graham's book and a book with Buffets's "essays". They both suggest that beta is not a reliable indicator ...

    - Jan 26 2014 - 12:54pm - 5 comments

  8. WACC calculation

    We are recently discussing a new discount rate methodology and would like to ask you for an advice. Part of our discount rate methodology discussion is concerned with size premium, namely how to "convert" the U.S. capital market based size ...

    - Jun 4 2015 - 12:40pm - 1 comment

  9. How to use CAPM in a sluggish market?

    a quick question- how to value a company using CAPM to caculate cost of equity of a bad market. Take China's Shanghai stock market as an example, the index decreased from 6,000 in 2007, to 3,000 in 2010, to 1,990 in 2012. we could not use a negative ...

    - Nov 27 2012 - 5:16am - 7 comments

  10. Question on alpha and beta

    Hi, Recent college graduate and new here to WSO, very excited to learn more about Finance. I have recently started creating an investing sort of tool in excel and I have a question regarding alpha and beta. As I understand (correct me if I'm wrong), ...

    - Jun 18 2012 - 7:48pm - 10 comments

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