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Hi John, I’m really sorry for this silly question but I am really confused with the difference between wacc and capm. I have read your notes with the lectures but still can’t get my head around what both show. Thank you
WACC is the overall cost of capital and is used to discount the cash flows when appraising a project.
CAPM is used to calculate the cost of equity for the level of risk in the equity.
I really do suggest that you watch the lectures again (in the order of the chapters in the free lecture notes).
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