1-Provide detailed explanation / discussion of the Efficient Market Hypothesis (EMH) and its implications in corporate finance. In addition, briefly explain how one can test its semi-strong form?
2-Explain in details how you can estimate weighted average cost of capital for a listed firm in addition discuss in your answer any problems (Statistical) which your analysis might encounter.
Weighted Average Cost of Capital is the average cost of a company’s capital after tax . Cost of comapny capital includes common stock, preferred stock, bonds, and any other long-term debt.
3-Explain, and in details, how you can test the empirical validity of the Capital asset Pricing Model. In addition, comment on what determines the value of systematic risk (beta).