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  1. 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 ask ...

    40 comments - 29 silver bananas - Jul 11 2015 - 3:54am -

  2. 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 ...

    12 comments - 0 silver bananas - May 30 2015 - 12:23pm -

  3. 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 d ...

    15 comments - 0 silver bananas - May 4 2014 - 5:19pm -

  4. 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 ...

    29 comments - 1 silver bananas - Nov 18 2012 - 6:38am -

  5. 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 ...

    5 comments - 0 silver bananas - Mar 8 2015 - 12:18pm -

  6. 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 ...

    5 comments - 0 silver bananas - Jan 26 2014 - 12:54pm -

  7. 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), ...

    10 comments - 0 silver bananas - Jun 18 2012 - 7:48pm -

  8. 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 coul ...

    7 comments - 0 silver bananas - Nov 27 2012 - 5:16am -

  9. An easy CAPM question

    Hey guys, This is probably obvious but I'm not seeing the answer. In CAPM and I guess you could generalize this to anytime you are using a tax shield, why do you just take the whole value of debt and multiply it by (1-t). I thought principal payments ...

    11 comments - 0 silver bananas - Aug 27 2012 - 9:14pm -

  10. CAPM and Cost of Capital

    Hey, So I've started to study up on DCF valuation. I get the basics, however, why is CAPM used to estimate the cost of capital? I thought that empirical studies show that CAPM is a poor way of estimating returns. So the difference between companies i ...

    10 comments - 0 silver bananas - Aug 27 2012 - 9:13pm -

  11. Which Internship to choose from (PWM)?

    Hey guys, I have been lurking on here for a while, and this is my first post. I have two internship offers this fall (couldn't find anything spectacular). There both at BB in PWM. I really can't decide which one would be more beneficial or rewar ...

    8 comments - 0 silver bananas - Aug 16 2011 - 6:27pm -

  12. Most important part of a valuation???

    Ok everybody...I would love to get as much input on this from as many people from as many countries as possible. I just spoke with a senior banker (remember I am in India), and he told me that in the entire valuation process significantly more importance ...

    8 comments - 0 silver bananas - Aug 27 2009 - 2:29am -

  13. CAPM

          Is CAPM used often? Assets Pricing CAPM ...

    6 comments - 0 silver bananas - Aug 27 2012 - 9:14pm -

  14. negative beta and Re

    Had a superday at a bulge bracket... In my first interview of the day, I was asked whether debt or equity is a more expensive form of capital. I answered equity because it's less senior in the capital structure and thus more risky and because of the ...

    7 comments - 0 silver bananas - Oct 7 2009 - 5:50pm -

  15. Expected Market Returns

    I can't figure out how the expected market return is calculated. I understand it's function in CAPM and in determining beta. But I don't see how any value for expected market return, market covariance with your stock, or variance of the mar ...

    6 comments - 0 silver bananas - Mar 27 2010 - 11:40pm -

  16. CAPM question

          What do you use for the risk free rate when calculating the cost of equity using CAPM? I have heard some different opinions, some places/guides say the 10 year US Gov Bond others say 3 month, etc. I would imagine that the answer is th ...

    4 comments - 0 silver bananas - Aug 27 2012 - 9:15pm -

  17. What Is The Capital Asset Pricing Model (CAPM)?

    The Capital Asset Pricing Model, or CAPM, is one of the most commonly used models for calculating the expected return on an asset and is used to price securities. The CAPM requires 3 data inputs: Beta of the asset (how much it moves relative to the market ...

    0 comments - silver bananas - Sep 2 2012 - 5:15am -

  18. Testing CAPM

          Hi guys, I'm testing CAPM and Fama&French factors models but I got so much diverisfied portfolio that I don't know which proxy I should get. My portfolio (48 assets): 20- equity indices for industry and countries 10- fix ...

    3 comments - 0 silver bananas - Nov 17 2012 - 11:51am -

  19. 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 wo ...

    2 comments - 0 silver bananas - Jun 19 2014 - 10:10pm -

  20. 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? CAPM What is CAPM? ...

    2 comments - 0 silver bananas - Jul 26 2013 - 1:29pm -

  21. What is a reasonable market return estimate for Pfizer Inc.?

          What would a reasonable market return (estimate) be for Pfizer Inc. be or any other comparable company? By comparable I mean a large cap, low beta, economically stable pharmaceutical firm (such as Merck & Co. etc. But more importa ...

    2 comments - 0 silver bananas - May 2 2012 - 8:28pm -

  22. 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 ma ...

    1 comment - 0 silver bananas - Jun 4 2015 - 12:40pm -

  23. Hamada formula

          Hi guys, When we use the Hamada formula to re-lever an unlevered beta, what do we use as Equity Value since it is the target of our valuation? Should we use the average capital structure of our comparables sample? If we do it this way ...

    0 comments - 0 silver bananas - Oct 28 2012 - 1:41pm -

  24. CAPM, WACC, Corp Finance Videos

          I want to brush up on corporate finance and was wondering if there are any good video programs out there on the topic. Mainly concerned about getting the nitty gritty down about CAPM. Corp Finance CAPM ...

    1 comment - 0 silver bananas - Aug 27 2012 - 9:15pm -

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