Cost of Capital, Leverage, & Capital Structure Flashcards
1
Q
It is the rate of return necessary to maintain market value or stock price of a firm
A
Cost of Capital
2
Q
Capital Asset Pricing Model (CAPM) Formula
A
Ke = Krf + B ( Km - Krf )
3
Q
A measure of volatility of a risk compared to the stock market as a whole
A
“B”, Beta Coefficient
4
Q
The beta coefficient is a measure of _______ in the Capital Asset Pricing Model (CAPM),
A
Non-diversifiable Risk
5
Q
A
