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