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J. Lintner, “The Valuation of Risk Assets and the Selection of Risky Investments in Stock Portfolios and Capital Budgets,” Review of Economics and Statistics, Vol. 47, 1965, pp. 13-37.

has been cited by the following article:

• TITLE: An Application of Fuzzy Set Theory to the Weighted Average Cost of Capital and Capital Structure Decision

  AUTHORS: Shin-Yun Wang, Chih-Chiang Hwang

  KEYWORDS: WACC, Capital Structure, Fuzzy Numbers, Capital Structure, Fuzzy Logic

  JOURNAL NAME: Technology and Investment, Vol.1 No.4, November 30, 2010

  ABSTRACT: The purpose of this paper is to present the use of fuzzy logic to improve the calculation of weighted average cost of capital (WACC). The fuzzy WACC approach not only allows the pre-tax cost of debt, the effective tax rate, the tax benefit, and cost of equity to be treated as fuzzy numbers, it also offers ranking means to find the optimal debt ratio. This paper contributes to the literature by offering alternative methods to calculate the WACC and the optimal debt ratio for firms under uncertainty. Compared with the traditional WACC, the fuzzy WACC model can overcome the problems pertinent to uncertainty, complexity and imprecision. This paper thus sheds light on capital structure decision making.