Supuestos implícitos en la utilización del Capital Assets Pricing Model – CAPM - Para el cálculo del costo del capital propio – EQUITY

Carlos Arturo Gómez Restrepo and Mario García Molina

Econógrafos, Escuela de Economía from Universidad Nacional de Colombia, FCE, CID

Abstract: The article elicits the assumptions and problems underlying the use of the CAPM in calculating the equity´s cost. It stresses the difference between the way decisions are made in the stock market and in the firm involved in production processes. It reviews the literature on CAPM and the Weighted Average Cost of Capital, WACC, stating that none of the papers found takes into account the entrepreneur´s logic. Based upon the theoretical developments of the CAPM, it shows the drawback of using this model in calculating the cost of capital in firms.

Keywords: CAPM; WACC; Profitability; Entrepreneur; Stock market (search for similar items in EconPapers)
JEL-codes: G11 G12 M21 (search for similar items in EconPapers)
Pages: 26
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:col:000176:023743

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