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  3. Wirtschaftswissenschaftliche Fakultät, Leibniz Universität Hannover
  4. Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät - Hannover Economic Papers (HEP), Leibniz Universität Hannover
Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/78307 
Title: 

Miles-Ezzell's WACC Approach Yields Arbitrage

Authors: 
Löffler, Andreas
Year of Publication: 
2002
Series/Report no.: 
Diskussionsbeitrag No. 248
Publisher: 
Universität Hannover, Wirtschaftswissenschaftliche Fakultät, Hannover
Abstract: 
A simple counterexample shows the the widely used WACC approach to value leverage firms developed by Miles and Ezzell can create an arbitrage opportunity. The only consequence to be drawn is that their WACC approach cannot be applied under the circumstances assumed by Miles and Ezzell.
Subjects: 
WACC
leverage ratio
tax shield
Document Type: 
Working Paper
Appears in Collections:
Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät - Hannover Economic Papers (HEP), Leibniz Universität Hannover

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