Explain how the CAPM assists in measuring both risk and return.
• Explain how the CAPM assists in calculating the weighted average costs of capital (WACC) and its components.
• Illustrate why some managers have difficulty applying the Capital Asset Pricing Model (CAPM) in financial decision making.
• Identify the benefits and drawbacks of using the CAPM.
Develop a 200 – 300 word answer supporting your position.