Capital asset pricing model Flashcards
1
Q
What does it provide
A
A relationship between risk and return
2
Q
What WACC figure do you get from it?
A
Cost of equity (Ke)
3
Q
When should you use this model?
A
When you are given the Beta
4
Q
What two alternatives are there to this model to finding the WACC
A
Earnings Retention Model and the Dividend Valuation Model
