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 nowhere near target state school, it's going to be an uphill climb to even get a real job. I realize this. Even more so looking at an investment analyst type of role at a REIT.

DCF - Beta & Expected Return

Doing a DCF of a mature retail company and have a couple of questions if you guys could help me out. They involve inputs to the CAPM in computing WACC...

The company's beta is not publicly available via free, public sources and I was curious if it would be appropriate to use an average of its peer group's betas as a proxy?

What are you guys typically using for the proxy for the expected return of the stock market? I was going to use a three or five year arithmetic average of the S&P's returns, but it seems like that may be a bit biased upward due to the crazy returns the past couple of years...

Thank you to anyone who can provide some insight!

CAPM- Cost of Debt


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 date.

This company did not yield any form of non-current liabilities, nor did the company prospectus mention any potential planning in this manner. Thus, in finding a suitable proxy for the firm (in terms of a DCF valuation and the CAPM model) I conducted a relative valuation between the firm and its four main industry competitors.

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 of risk and they also kinda hint that CAPM is not a very good model for evaluation. I still use CAPM and the regular formula to get WACC, but sometimes I get a WACC as low as 3%, which is ridiculous if you ask me. The most of the cases I get a WACC between 7.5% and 9%. Can I get some of your opinions regarding this perspective on WACC and what kind of numbers you get? Thank you

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 questions (although I did do a 3 hour modelling exam for one bank). Perhaps this is because I was coming from a couple of years already in IB and the interviewers assumed I knew what I was doing. Still, I took the time to put my thoughts in order. If any of you would like a refresher, you can find some of my notes below.

Just a small point to start with – Valuation is often an art and not an exact science. There are many different ways to approach the numbers, often depending on what you (and your client) want the numbers to show.

It is critical, however, that you can stand in front of a group of senior Japanese executives, for example, and confidently explain to them why your numbers stack up the particular way they do. Similarly, if you are preparing for an interview by simply memorizing the below formulas, but you cannot smoothly explain the function of each piece of each formula, you will not (or at least you should not) proceed to the next round.

Deleveraging and leveraging Beta in CAPM

Hi, I'm new here so apologies if this is in the wrong place. I was wondering why is it in the CAPM you have to delever and then lever the beta? And if someone could outline the process of how you would go about doing it?


Capital Asset Pricing Model and MPT Intro

Can anyone recommend a good text for introduction to CAPM and MPT for someone who is good with math but has little formal financial training?

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 risk premium, right?


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