Principles of Corporate Finance
Testing the CAPM Avg Risk Premium 1931-65 1.0 Portfolio Beta SML 30 20 10 0 Investors Market Portfolio Beta vs. Average Risk Pre ...
Testing the CAPM Avg Risk Premium 1966-91 1.0 Portfolio Beta SML 30 20 10 0 Investors Market Portfolio Beta vs. Average Risk Pre ...
Testing the CAPM 0 5 10 15 20 25 Average Return (%) Company size Smallest Largest Company Size vs. Average Return ...
Testing the CAPM 0 5 10 15 20 25 Average Return (%) Book-Market Ratio Highest Lowest Book-Market Book-Market vsvs. Average Retur ...
Consumption Betas vs Market Betas Stocks (and other risky assets) Wealth = market portfolio ...
Consumption Betas vs Market Betas Stocks (and other risky assets) Wealth = market portfolio Market risk makes wealthuncertain. ...
Consumption Betas vs Market Betas Stocks (and other risky assets) Wealth = market portfolio Market risk makes wealthuncertain. S ...
Consumption Betas vs Market Betas Stocks (and other risky assets) Wealth = market portfolio Market risk makes wealthuncertain. S ...
Consumption Betas vs Market Betas Stocks (and other risky assets) Wealth = market portfolio Market risk makes wealthuncertain. S ...
Consumption Betas vs Market Betas Stocks (and other risky assets) Wealth = market portfolio Market risk makes wealthuncertain. S ...
Arbitrage Pricing Theory Alternative to CAPMAlternative to CAPM Expected Risk Premium = r - rf = Bfactor1(rfactor1 - rf) + Bf2(r ...
Arbitrage Pricing Theory Alternative to CAPMAlternative to CAPM Expected Risk Premium = r - rf = Bfactor1(rfactor1 - rf) + Bf2(r ...
Arbitrage Pricing Theory Estimated risk premiums for taking on risk factors (1978-1990) Mrket 6.36 Inflation -.83 Real GNP .49 E ...
u Capital Budgeting and Risk Principles of Corporate Finance Brealey and Myers Sixth Edition Chapter 9 ...
Topics Covered w Measuring Betas w Capital Structure and COC w Discount Rates for Intl. Projects w Estimating Discount Rates w R ...
Company Cost of Capital w A firm’s value can be stated as the sum of the value of its various assets. Firm value = PV(AB) = PV(A ...
Company Cost of Capital w A company’s cost of capital can be compared to the CAPM required return. Required return 1.26 Project ...
Measuring Betas w The SML shows the relationship between return and risk. w CAPM uses Beta as a proxy for risk. w Beta is the sl ...
Measuring Betas Hewlett Packard Beta Slope determined from 60 months of prices and plotting the line of best fit. Price data - J ...
Measuring Betas Hewlett Packard Beta Slope determined from 60 months of prices and plotting the line of best fit. Price data - J ...
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