wacc (weighted average cost of capital) my ass.

10Oct06

according to the modigliani-miller theorem, if there were no taxes, or bankruptcy costs or assymetric information (between parties to a transaction), and if it were operating in an efficient market, the value of a company would not be effected by its means of finance. the irony here is not that there are so many unreal assumptions in such a practically used paradigm. uh-uh. the irony is that the two idiots who came up with this piece of crap have both won nobel prizes in economics. that tag obviously means that the theorem is now sacrosanct and you can’t attempt any question on capital structure without understanding its dynamics.

and to think i once thought that talking about investment appraisals and costs of funds and hedging of investment risks and capital asset pricing models gave a guy a kind of classy and cool (in a very worldly way) touch. should’ve known better. now i think there is nothing more boring than the stuff on cnbc pakistan when one egghead questions another on the ideal way to manage his company’s working capital. to make sense of this stuff you have to be the guy who read the financial times in the eighth grade while you were ogling at sable’s swimsuit pics in the wwe magazine.

this is a rather roundabout way of saying that i have been studying strategic financial mangement for the past five hours without a second’s break. to pass the exam i have to be as comfortable with discounted cash flow as i am with the two times table. i don’t know what scares me more, the prospect of succeeding or the prospect of failing.

save me from the nothing i’ve (planned to) become…

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2 Responses to “wacc (weighted average cost of capital) my ass.”

  1. What the hell???? “i don’t know what scares me more, the prospect of succeeding or the prospect of failing” who talks like this you loser?!?! Get a grip and get a life!!!

  2. much as i appreciate objective critique, you, my dear, were simply not invited.

    and since you so very obviously do not talk like me, let me put it to you in language you would understand. if you don’t like it, FUCK OFF, if you’re not sure, FUCK OFF and if by some freak of fate you manage to understand it and like it, FUCK OFF anyway.

    this blog is not for you.


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