capital, where the latter depends on the project’s disequilibrium systematic risk. It is shown that the disequilibrium net …) an example showing that CAPM-minded evaluators may incur arbitrage losses …

disequilibrium NPV for decision-making is deductively drawn from the CAPM, its use for both valuation and decision should be rejected. …This paper shows that a decision maker using the CAPM for valuing firms and making decisions may contradict Modigliani … and Miller’s Proposition I, if he adopts the widely-accepted disequilibrium NPV. As a consequence, CAPM-minded agents …

disequilibrium NPV for decision-making is deductively drawn from the CAPM, its use for both valuation and decision should be rejected. …This paper shows that a decision maker using the CAPM for valuing firms and making decisions may contradict Modigliani … and Miller’s Proposition I, if he adopts the widely-accepted disequilibrium NPV. As a consequence, CAPM-minded agents …

Present Value and the disequilibrium Net Future Value may be used for valuation, given that they are additive. However … from this model: the disequilibrium Net Present Value, the equilibrium Net Present Value, the disequilibrium Net Future …, despite their additivity, the latter are not always reliable metrics, because they do not signal arbitrage opportunities …

capital, where the latter depends on the project’s disequilibrium systematic risk. It is shown that the disequilibrium net …) an example showing that CAPM-minded evaluators may incur arbitrage losses. …

This paper shows that (i) project valuation via disequilibrium NPV+CAPM contradicts valuation via arbitrage pricing …, (ii) standard CAPM-minded decision makers may fail to profit from arbitrage opportunities, (iii) standard CAPM …-based valuation violates value additivity. As a consequence, the standard use of CAPM for project valuation and decision making should …

to valuation with a simple but new approach to estimating the Market or Equity Risk Premium (ERP) that produces very good …

illustrations: Valuation of a firm using DCF Model with time-varying discount rates and Past Valuation data of S&P 500 using DDM …