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One of the major strengths of the Capital Asset Pricing Model (CAPM) is that it makes realistic assumptions of both the financial market and investor

"One of the major strengths of the Capital Asset Pricing Model (CAPM) is that it makes realistic assumptions of both the financial market and investor behaviours, and hence it can help investors to make precise estimations of asset prices."

Examine the validity of this statement, by making extensive reference to the capital structure theory and evidence.

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