Arbitrage, Cost of Capital and the Miles/Ezzell-Wacc in a Three-Date Model

Based on an example Loeffler claims in a recent FINANZ BETRIEB-article that the application of the Miles/Ezzell-WACC may offer arbitrage opportunities. He concludes that the Miles/Ezzell-WACC is not applicable without restrictions. We discuss the example of Louml;ffler and show that either (a) the example offers arbitrage even in the case of fully equity finance, or (b) the example violates the assumptions made by Miles/Ezzell

MoreLess

Year of publication:	[2011]
Authors:	Schwetzler, Bernhard
Other Persons:	Rapp, Marc Steffen (contributor)
Publisher:	[2011]: [S.l.] : SSRN

freely available

Full text |

More access options

Check Google Scholar

In German libraries (KVK)

I need help

Extent:	1 Online-Ressource (8 p)
Type of publication:	Book / Working Paper
Notes:	In: Finanz Betrieb, pp. 502-505, September 2002
Classification:	G31 - Capital Budgeting; Investment Policy
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://www.econbiz.de/10012757247