I'm delighted to find your work. Much of traditional academic analysis of investing makes little sense to this physicist who turned to investing of necessity. As an owner, you want to own businesses whose cash return from the employment of new cash equity exceeds the associated costs. [Technically it makes sense to me to work Modigliani & Miller's Proposition II into a form that provides that Return on Equity.] This is a primary focus of my own analysis, writing, and investing.
Standard WACC formulas, which you can also derive from M&M Prop II, are just stupid, because there is zero rational basis to know what "Cost of Equity" to plug in. Plus they are ill adapted to other circumstances such as capital recycling.
I'm delighted to find your work. Much of traditional academic analysis of investing makes little sense to this physicist who turned to investing of necessity. As an owner, you want to own businesses whose cash return from the employment of new cash equity exceeds the associated costs. [Technically it makes sense to me to work Modigliani & Miller's Proposition II into a form that provides that Return on Equity.] This is a primary focus of my own analysis, writing, and investing.
Standard WACC formulas, which you can also derive from M&M Prop II, are just stupid, because there is zero rational basis to know what "Cost of Equity" to plug in. Plus they are ill adapted to other circumstances such as capital recycling.
Looking forward to seeing more of your work.