18 Topics Badly Explained by ManyFinanceProfessors

ArXiv ID: ssrn-3270268 “View on arXiv”

Authors: Unknown

Abstract

This paper addresses 18 finance topics that are badly explained by many Finance Professors. The topics are: 1. Where does the WACC equation come from?<b

Keywords: WACC, Capital Structure, Corporate Valuation, Financial Theory, Equities

Complexity vs Empirical Score

• Math Complexity: 4.5/10
• Empirical Rigor: 1.0/10
• Quadrant: Philosophers
• Why: The paper focuses on conceptual explanations and critiques of standard finance formulas (e.g., WACC, equity premium) with moderate mathematical density but no empirical data or backtesting, aligning with a philosophical discourse on theory.

  flowchart TD
    Q["Research Question<br>How do many Finance Professors explain the WACC equation?"]
    
    M["Methodology<br>Comparative Analysis of 18 Topics"]
    
    D["Data & Inputs<br>18 Finance Topics<br>Specifically: WACC Derivation"]
    
    C["Computational Process<br>Analyze Theoretical Foundations & Mathematical Derivation"]
    
    F["Key Findings & Outcomes<br>WACC equation roots in Modigliani-Miller<br>Optimal capital structure theory<br>Clarification of 18 misexplained topics"]
    
    Q --> M
    M --> D
    D --> C
    C --> F