Hey guys so in merger models we use the inverse P/E and in the DCF we use the CAPM which is the opportunity cost of equity capital.
Would the merger model CoE be the opportunity cost of capital as well? How can we intuitively think about the CoE in a merger model (earnings/$ price of the stock) and compare it to the CoE in the CAPM?
Are they fair comparisons or is the CoE in a merger model just completely different with only the same name.
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