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WACC is the weighted average cost of capital therefore from the business's standpoint, they would want to have a lower WACC because it is an average of the % cost of capital. From an investor's standpoint: it can be mixed. For a bondholder, they would want WACC to be a bit high but not by too much. For example, a higher WACC may mean the company is paying a ...


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The coefficients assuming they are statistically significant can be interpreted whether or not the underlying portfolio is efficient. The CAPM or FF4 simply tries to decompose a portfolio into a series of linear exposures + an intercept (alpha) which can be viewed as constant added value. In mathematical terms the regression is explaining how much of ...


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Mean-Variance Optimization is a generic framework that creates optimal portfolios relative to two measures of risk - mean and standard deviation (covariation). It holds in general for elliptical distributions where the scale and location of the distribution are the only sources of risk and return. For a Normal Distribution this is $(\mu, \Sigma)$. CAPM is a ...



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