Capital Asset Pricing Model (CAPM)
It uses the asset's sensitivity to non-diversifiable or systemic risk — represented as Beta (β) — as well as the expected return of the market, the expected return of a "risk-free" asset and other premiums that are specific to the asset.
The equation for CAPM is:
Ke = Rf + Beta (market risk premium) + (other company-specific premiums)
Where Ke refers to the cost of equity.
Latest Articles Related to Capital Asset Pricing Model (CAPM)
Read: 1,090 times
Read: 4,372 times
Read: 1,271 times
This web site is intended only to convey information. It is not to be construed as an investment guide or as an offer or solicitation of an offer to buy or sell any securities. The author has taken all usual and reasonable precautions to determine that the information contained in this website has been obtained from sources believed to be reliable.