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2. Capital asset pricing model - Wikipedia

   en.wikipedia.org/wiki/Capital_asset_pricing_model

   The CAPM is a model for pricing an individual security or portfolio. For individual securities, we make use of the security market line (SML) and its relation to expected return and systematic risk (beta) to show how the market must price individual securities in relation to their security risk class. The SML enables us to calculate the reward ...

3. Hamada's equation - Wikipedia

   en.wikipedia.org/wiki/Hamada's_equation

   In corporate finance, Hamada’s equation is an equation used as a way to separate the financial risk of a levered firm from its business risk. The equation combines the Modigliani–Miller theorem with the capital asset pricing model. It is used to help determine the levered beta and, through this, the optimal capital structure of firms.

4. What is the Capital Asset Pricing Model (CAPM)? - AOL

   www.aol.com/finance/capital-asset-pricing-model...

   Financial analysts use CAPM to estimate the fair value of a stock by considering factors such as the stock’s volatility , the risk-free interest rate and the equity risk premium – the premium ...

5. Cost of capital - Wikipedia

   en.wikipedia.org/wiki/Cost_of_capital

   Sustainable finance. v. t. e. In economics and accounting, the cost of capital is the cost of a company's funds (both debt and equity), or from an investor's point of view is "the required rate of return on a portfolio company's existing securities". [1] It is used to evaluate new projects of a company.

6. Risk premium - Wikipedia

   en.wikipedia.org/wiki/Risk_premium

   In Finance, CAPM is generally used to estimate the required rate of return for an equity. This required rate of return can then be used to estimate a price for the stock which can be done via a number of methods. [12] The formula for CAPM is: CAPM = (The Risk Free Rate) + (The Beta of the Security) * (The Market Risk Premium) [13]

7. Risk-free rate - Wikipedia

   en.wikipedia.org/wiki/Risk-free_rate

   The risk-free rate is also a required input in financial calculations, such as the Black–Scholes formula for pricing stock options and the Sharpe ratio. Note that some finance and economic theories assume that market participants can borrow at the risk-free rate; in practice, very few (if any) borrowers have access to finance at the risk free ...