Capital asset pricing model (capm), Financial Management

Assignment Help:

Capital Asset Pricing Model (CAPM)

Capital Asset Pricing Model (CAPM) is a model which utilizes the measure of systematic risk, 'B' to price assets. The expected rate of return is given by:

Ke = Rf + B x {Rf - Rm}

Where:

Rf = Risk free rate of return,

Rm = Market rate of return,

Ke = Expected rate of return,

B = Beta value for the stock

Related Discussions:- Capital asset pricing model (capm)

Cost of capital in finance, cost of capital in finance

cost of capital in finance

Explain the methods used to treat the obsolete stock, Explain the methods u...

Explain the methods used to treat the obsolete stock Review Inventory for obsolete items Make materials review board Include an obsolescence review in the closing p

Explain capital investment project appraisal, Question: (a) The future ...

Question: (a) The future value (F) of a sum invested now can be calculated using the formula: F = P(1 + r) n Required: (i) Describe each of the other constituents in the

Consequence of the cash operating cycle, Q. Consequence of the cash operati...

Q. Consequence of the cash operating cycle? The cash operating cycle is the length of time among paying trade payables and receiving cash from receivables. It is able to be cal

Organization and management pattern of uti, Organization and Management Pat...

Organization and Management Pattern of UTI UTI has a full-time Chairman with an Executive Trustee reporting to him. The Executive Trustee looks after the Corporate Office, Zona

Issuance calendar, Issuance Calendar Issuance calendar gives clear and ...

Issuance Calendar Issuance calendar gives clear and timely information about the borrowing program of the government. It clearly conveys the maturity profile of outstanding sto

Calculate the compound return, a) What two legal documents should the coup...

a) What two legal documents should the couple ensure are up-to-date if they want a sound estate plan? What would happen if either became incapacitated or died and didn't have any

Explain implications of purchasing power parity, Explain the implications o...

Explain the implications of purchasing power parity for operating exposure. Answer: Determine if the exchange rate changes are matched by the inflation rate differential among

Find out the price of equity shares., Following details are related to thre...

Following details are related to three companies which are identical except in terms of ''r''. Company ABC Ltd. MNC Ltd. XYZ Ltd. Cost of capital 10% 10% 10% Earn per

Explain in-quote-driven according to trade intermediation, Explain about th...

Explain about the in-quote-driven according to trade intermediation. In quote-driven dealer markets, a market-maker or dealer is onto one side of each trade. (Remember that dea

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages