Applying the Capital Asset Pricing Model

Harris, Robert S.

  • ケース
DARDEN

This note discusses how some of the most financially sophisticated companies and financial advisors estimate the cost of equity capital. It focuses on areas where finance theory is silent or ambiguous and practitioners are left to their own devices. Survey evidence shows that the Capital Asset Pricing Model (CAPM) is the most widely used model. The note discusses methods companies use to estimate the three key elements needed to apply the CAPM: a proxy for the risk-free rate, an estimate of beta, and an equity-market risk premium. The note is useful for students attempting to apply the Capital Asset Pricing Model.

出版日
2004/10
改訂日
2014/04
領域
財務
ボリューム
10ページ
コンテンツID
CCJB-UVA-F-1456
オリジナルID
UVA-F-1456
ケースの種類
Technical Note
言語
英語
カラー
製本の場合、モノクロ印刷での納品となります。