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The Dole family owns 100% of the shares of Dole Inc. By and large, this private company is the only source of wealth for the
The Dole family owns 100% of the shares of Dole Inc. By and large, this private company is the only source of wealth for the family (i.e., family members do not have any other substantial source of wealth or income). The CFO refuses to use CAPM to value Dole Inc.s projects because, in her words, CAPM measures only the market (or systematic) risk, while the Dole family cares about the total risk of their company. Does the CFOs argument make sense? Please provide the rationale behind your answer.
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