The aim of this paper is to contribute to a deeper knowledge of the CAPM in the framework of company valuation based our reasoning on the differentiation between the so-called purely financial investor and economic risk investor. Our argument is that CAPM is not a good reference to be applied in...

In this study, we intend to reveal some problems with the classic valuation method - the Weighted Average Cost of Capital (WACC) method. We first address a fundamental question about WACC, i.e. should WACC be interpreted as a spot rate, a forward rate, or any kind of average of either of them?...