How to Use CAPM for Project Analysis?

      
			              Forum
			            
			            	Reuben Ngeti Mwakisachi, Kenya
			            
How to Use CAPM for Project Analysis?

	          		🔥NEW How do I use CAPM to gauge / decide whether to take up a project or not?

If you can, please give an illustration. How superior is CAPM as compared to WACC?
				      
X

							  			Welcome to the Capital Asset Pricing Model forum. The topic being discussed here is: "How to Use CAPM for Project Analysis?". 
										
Please sign up now to read all responses and to join this discussion yourself. 

										Log in

						            	mccarthy
Accountant, Ireland
												
				                How to Use CAPM for Project Analysis

													CAPM is one of a number of methods used to calculate the cost of equity. The resultant cost of equity can be included subsequently in calculating the WACC of a company which is funded by both debt and equity. 

The question is not whether CAPM is superior to WACC but to other possible ways of calculating the cost of equity to be put in to the WACC calculation. 

CAPM could of course be used in appraising a project in an all equity companies.
				                
Leave a comment?

			                            More on Capital Asset Pricing Model:
			                          
													            	Summary
													            
		                              Special Interest Group
		                            
		                            Do you have a keen interest in Capital Asset Pricing Model? Become our SIG Leader