Summary
Meaningful evaluation equations must be in line with the no-arbitrage principle. If they are not, one can derive any company value from them. This is unacceptable both for practitioners and for academics. This paper shows that total beta does not meet the no-arbitrage principle.
Why Total Beta Produces Arbitrary Valuations: A Violation of the “No-Arbitrage” Principle
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Copyright American Society of Appraisers
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