@wikipedia
Potential interest Shareholders' expectation on the annual return rate on its equity in the shareholders equityBusiness:
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K_DE = R_f + \beta \, R_p\frac{\rm Return}{\rm E} |
where
| R_f | risk-free bond | annual cash return , whether as dividends or as capital growth |
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R_p | risk premium | | sensitivity to market risk for the security
The most popular model of estimating the Cost of Equity is Capital Asset Pricing Model (CAPM):
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| Capital Asset Pricing Model = CAPM |
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| Capital Asset Pricing Model = CAPM |
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| nopanel | true |
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See also
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Business / Business Administration / Financial Management / Financial Accounting
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[ Capital Asset Pricing Model (CAPM) ]
