Capital Asset Pricing Model

Capital Asset Pricing Model - E = Beta ( ) ( ) E f E M f E...

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Capital Asset Pricing Model: Capital Budgeting Jiraphan Chantarawatana
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Cost of Capital A key input to the capital budgeting process most often use the CAPM for estimating the cost of capital
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Capital Asset Pricing Method CAPM formula E(R E ) = The expected return on firm’s equity R f = Risk free rate E(R M ) = Expected market return
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Unformatted text preview: E = Beta ( ) ( ) E f E M f E R R E R R = +-The Capital Asset Pricing Model Problems The beta most use is historical beta Difficult to determine the market risk premium What are companies that now use the CAPM in their capital budgeting process to do?...
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This note was uploaded on 05/04/2008 for the course FINC 6320 taught by Professor Jamesowens during the Spring '08 term at Texas A&M.

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Capital Asset Pricing Model - E = Beta ( ) ( ) E f E M f E...

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