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Define Capm? |
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Answer» CAPM is the capital asset pricing MODEL, and it is a model designed to find the EXPECTED return on an investment and THEREFORE the appropriate discount rate for a company’s cash flows. It provides the required rate of return GIVEN the riskiness of the asset. CAPM is the capital asset pricing model, and it is a model designed to find the expected return on an investment and therefore the appropriate discount rate for a company’s cash flows. It provides the required rate of return given the riskiness of the asset. |
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