CAPM is the standard methodology used in financial academia to calculate the cost of equity. But value investors like Warren Buffett have been outspoken in the past about its imperfections. So why shouldn’t we use CAPM to measure the cost of equity?
The myth of CAPM as a measure of cost of equity
The myth of CAPM as a measure of cost of…
The myth of CAPM as a measure of cost of equity
CAPM is the standard methodology used in financial academia to calculate the cost of equity. But value investors like Warren Buffett have been outspoken in the past about its imperfections. So why shouldn’t we use CAPM to measure the cost of equity?