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Which models apart from CAPM can be used to determine optimum capital?

Which models apart from CAPM can be used to determine optimum capital?
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Answer #1

Below are the models other than CAPM, that can be used to determine optimum capital.

1) Modigliani & Miller approach signaling theory, agency theory, free cash flow theory. All are relevant to understanding optimal capital structure.

2) Efficient frontier tools can also be used in determine optimum capital.

3) You can also use consumption CAPM, where the consumption growth is replaced by market return for linear models.

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