As risk is increased, the cost of capital can be expected to increase. An extensively used method of adjusting the cost of capital for risk is to use the capital asset pricing model (CAPM). The CAPM makes use of the prices that the market is setting for return-risk trade-offs rather than using subjective measures of attitudes toward risk.
Details
- Publication Date
- Jun 19, 2013
- Language
- English
- Category
- Education & Language
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- All Rights Reserved - Standard Copyright License
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- By (author): Homework Help Classof1
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