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)

Discuss about the materiality, Discuss about the Materiality An item ca...

Discuss about the Materiality An item can be considered material if its omission would reasonably influence the decisions of an addressee of report, a misstatement is material

Accounting pricniple, The salaries paid in 2004 is Rs.500000; salaries outs...

The salaries paid in 2004 is Rs.500000; salaries outstanding Rs.20000; salaries paid in advance for 2001 is Rs.30000. What is the actual salary expenditure for 2004?

Help ASAP, If firm A has a higher debt-to-equity ratio than firm B then tha...

If firm A has a higher debt-to-equity ratio than firm B then that means what

Advantages of just-in-time inventory management, Q. Advantages of Just-in-t...

Q. Advantages of Just-in-time inventory management? JIT inventory management methods look for eliminate waste at all stages of the manufacturing process by minimising or elimin

Difference between debtcapital and equity capital, Difference between Deb...

Difference between Debtcapital and Equity capital Debtcapital comprises: Long-term loans (debentures, loan stock etc.) Preference share capital May also in

Securities exchange act, Securities Exchange Act of 1934 With this Act,...

Securities Exchange Act of 1934 With this Act, the Congress created the Securities and Exchange Commission. The Act empowers the SEC with broad authority over all aspects of th

Management accounting, Management Accounting: Management accounting on ...

Management Accounting: Management accounting on the other hand tends to focus internally. Reports generated through management accounting processes will be used by the organisa

prepare a cash budget, You are presented with the budgeted data shown belo...

You are presented with the budgeted data shown below for the period November 20X1 to June 20X2 by your firm. It has been extracted from the other functional budgets that have been

Economics, a) Define monetary policy, and discuss the operation of monetary...

a) Define monetary policy, and discuss the operation of monetary policy in the United States post-GFC.

Examine the concepts related to financial management, Assume you are a prof...

Assume you are a professional financial analyst working for a wealthy investor.  Your client has $2.6 million to invest and wants to sink it into a single stock (diversification is

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd