The Leverage Factor by James Ardell - HTML preview
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SECTION 3: REAL WORLD CASES 376
15. - Analytical Tools: Practical Application 376
The Toleration of Imprecision, 376
Erring on the Side of Conservatism, 378
Brief Methodologies for Determining the Cost of Equity, 379 The Hurdle Rate, 382
The EVA / Capital Dynamic, 383
The Weighted Average Cost of Capital, 383
Comparing Risk: Justification for Two Costs of Equity, 386
Changes in the CAPM, 386
The Comparative Capital Dynamic, 388
The Marginal Benefits Equation, 388
Leverage State Analysis, 391
The “Look Ahead” Bias, 395
Micro Analysis: Quarterly Observation, 396
Naive Extrapolation, 397
Earnings Pressure, 399