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L_16_ - Outline Lecture 16 Organization Cost of Capital...

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Outline Lecture 16 Organization Cost of Capital CAPM The Security Market Line
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THE COST OF CAPITAL: Basic Ideas How To determine the appropriate discount rate for use in evaluating an investment's worth we need to
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THE COST OF CAPITAL: Basic Ideas Cost of capital Cost of capital The cost of capital The following all mean the same thing:
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Expected Return and Variance: Basic Ideas Rational investors Investors
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The Cost of Capital Cost of Capital Cost of Capital (Required Rate of Return)
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The Cost of Capital Capital structure (the firm's ratio of debt to equity) taken as given for now.
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The Cost of Capital: Cost of Equity The return that investors require for the equity financing can be estimated by one of the two models: CAPM approach Dividend Growth Model Approach
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The Capital Asset Pricing Model The Capital Asset Pricing Model (CAPM) - an equilibrium model of the relationship between risk and return.
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