Caveats

Eva R. Porras

Chapter 4 in The Cost of Capital, 2011, pp 131-164 from Palgrave Macmillan

Abstract: Abstract A firm’s weighted average cost of capital (WACC) is simply the return investors expect to earn on the average market risk of their firm’s investments. Thus, when using the CAPM in assessing whether a new projects is viable, we need to find out if the project is of ‘average’ risk.

Keywords: Discount Rate; Cash Flow; Capital Structure; Stock Option; Equity Capital (search for similar items in EconPapers)
Date: 2011
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DOI: 10.1057/9780230297678_5

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