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CAPM : The Model and 307 Comments About It
Fernandez, Pablo - 2019
about the CAPM: 234 basically agree in using the adjective “absurd” to qualify the CAPM and 71 do not agree for several …) their opinions: real opinions of real persons that know finance and have thought about the CAPM, the market return, the beta …
Persistent link: https://www.econbiz.de/10012904629
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CAPM : An Absurd Model
Fernandez, Pablo - 2019
The CAPM is about expected return. If you find a formula for expected returns that works well in the real markets …, would you publish it? Before or after becoming a billionaire?The CAPM is an absurd model because its assumptions and its … predictions/conclusions have no basis in the real world. The use of CAPM is also a source of litigation: many professors, lawyers …
Persistent link: https://www.econbiz.de/10012904691
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Price to Earnings Ratio, Value to Book Ratio and Growth
Fernandez, Pablo - 2019
The PER is the most commonly used parameter in the stock market. The PER is the result of dividing the equity market value by the company's profit after tax.The PER depends on a number of factors, some of which are out of the company's control, such as variations in interest rates, and others...
Persistent link: https://www.econbiz.de/10012905422
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The equity premium in 150 textbooks
Fernandez, Pablo - In: Journal of Financial Transformation 27 (2009), pp. 14-18
I review 150 textbooks on corporate finance and valuation published between 1979 and 2009 by authors such as Brealey, Myers, Copeland, Damodaran, Merton, Ross, Bruner, Bodie, Penman, and Arzac, and find that their recommendations regarding the equity premium range from 3% to 10%, and that 51...
Persistent link: https://www.econbiz.de/10008471885
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Value of Tax Shields (VTS) : 3 Theories with 'Some' Sense
Fernandez, Pablo - 2019
The value of tax shields (VTS) defines the increase in the company's value as a result of the tax saving obtained by the payment of interest. However, there is no consensus in the existing literature regarding the correct way to compute the VTS. Most authors think of calculating the VTS in terms...
Persistent link: https://www.econbiz.de/10012904517
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The Market Portfolio is NOT Efficient : Evidences, Consequences and Easy to Avoid Errors
Fernandez, Pablo - 2019
The Market Portfolio is not an efficient portfolio. There are many evidences that tell us that: the equal weighted indexes have beaten their market-value weighted indexes for many years, many easy-to-build portfolios (some “smart-beta”, “multifactors”) have beaten market-value weighted...
Persistent link: https://www.econbiz.de/10012903557
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WACC and CAPM According to Utilities Regulators : Confusions, Errors and Inconsistencies
Fernandez, Pablo - 2019
CAPM and the WACC), several inconsistencies estimating parameters and multiply the WACC by the depreciated book value of …
Persistent link: https://www.econbiz.de/10012893723
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A Case of Insider Trading in Spain (in Spanish)
Fernandez, Pablo - 2009
Persistent link: https://www.econbiz.de/10013157671
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APV and WACC with Constant Book Leverage Ratio
Fernandez, Pablo - 2007
We value a company that targets its capital structure in book-value terms. This capital structure definition provides us with a Value of Tax Shields that lies between those of Modigliani-Miller (fixed debt) and Miles-Ezzell (fixed market-value leverage ratio). If a company targets its leverage...
Persistent link: https://www.econbiz.de/10012730269
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A General Formula for the Wacc : A Correction
Fernandez, Pablo - 2007
This paper corrects some equations of Farber, Gillet and Szafarz (2006). The WACC is a discount rate widely used in corporate finance. However, the correct calculation of the WACC rests on a correct valuation of the tax shields. The value of tax shields depends on the debt policy of the company....
Persistent link: https://www.econbiz.de/10012731341