BUSINESS FINANCE II (İŞLETME FİNANSI II) - (İNGİLİZCE) Dersi Cost of Capital soru detayı:

PAYLAŞ:

SORU:

In Capital Asset Pricing Model, what are the second and third and final points in calculating the required return?


CEVAP:

Secondly, in CAPM applications the estimation of the market return, hence the market risk premium (MRP) which is the expected market return minus the risk-free rate is essential. Thirdly, the beta of the stock in question is determined. As a final step, after the estimation of all the parameters in the CAPM equation, the required return on the stock is computed, which is the cost of the common equity.