The income statement and balance sheet of Madera Inc are presented and the meaning of each account is explained in the simplest possible way. The following questions arise: What is the net income? Is it what the shareholders “earn”, what the company “earns”, what someone “earns”?...

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...

We show, as simply as possible, the model's development, its implications and the assumptions on which it is based.The paper also contains 307 interesting comments and criticism from several professors, finance professionals and Ph.D. students about the CAPM: 234 basically agree in using the...

We report betas of 1,385 US companies on March 31, 2014, calculated with the S&P500. We calculate 147 betas for each company using monthly, weekly and daily returns and using different intervals: from a year to five years. The average (median) of the difference [maximum beta - minimum beta] was...

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...

Spanish Abstract: El CAPM es un modelo absurdo porque sus hipótesis y sus conclusiones/predicciones son opuestas a la realidad (describen “un mundo” que no es el nuestro). La hipótesis más extravagante es que los inversores tienen expectativas homogéneas (todos esperan la misma...

Spanish Abstract: Se explica la fusión de Caja Cantabria, Asturias y Extremadura para formar Liberbank. Se centra la atención en los propietarios de preferentes y bonos subordinados de las 3 Cajas. No fueron tratados como preferentistas y fueron expropiados mientras que los accionistas...

Spanish Abstract: Se explica la fusión de Caja Cantabria, Asturias y Extremadura para formar Liberbank.Se centra la atención en los propietarios de preferentes de Caja Cantabria y se plantean varias preguntas. ¿Cuál es el valor de la acción de Liberbank más representativo después del...

Spanish Abstract: En esta nota se repasan los conceptos y parámetros de valoración por descuento de flujos (y la relación entre ellos) con cuatro ejemplos sencillos. Se valoran inicialmente las acciones de una empresa sin deuda ni crecimiento (una perpetuidad). Posteriormente se introduce...

The all-shareholder return is the return that all the shareholders of a company had in a period. It is equal to the hypothetical return of a unique shareholder of the company. It is also the return of a shareholder that always had a constant proportion (ie. 0,2%) of the shares.The all-period...