Given the extensive problems with the CAPM assumptions, why is it considered the best method for computing
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Given the extensive problems with the CAPM assumptions, why is it considered the best method for computing cost of equity? Do you agree with this? What alternatives exist?
What can/should a financial manager do to account for the fact that the value of Beta will change given how market returns are calculated (i.e., using the Dow Jones, NASDAQ, or S&P 500)?
- Are there instances where this isn't a concern, such as all estimates of Beta being greater than 1.0?
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