Many investors use the capital asset pricing model (CAPM) as a way to estimate the potential return of a stock or other asset within the context of its intrinsic risk. Used primarily to analyze ...

The traditional formula for the cost of equity is the dividend capitalization model and the capital asset pricing model (CAPM). The cost of equity is the return that a company requires for an ...

But did you know this relationship is a central principle in finance? It's captured by the capital asset pricing model (CAPM), which quantifies the market risk premium – the difference between ...

The Capital Asset Pricing Model (CAPM) is a simple heuristic for thinking about market returns. Basically, the idea is that the main risk that you can’t diversify away from is collective ...

The Capital Asset Pricing Model (CAPM) says that you can get a low fixed return (like on Treasuries) or you can get a higher floating return for taking cyclical risk (like on corporate equities).

Black, Fischer, Michael C. Jensen, and Myron Scholes. "The Capital Asset Pricing Model: Some Empirical Tests." In Studies in the Theory of Capital Markets, edited by ...

Merton, Robert C. "A Reexamination of the Capital Asset Pricing Model." In Studies in Risk and Return, edited by J. Bicksler and I. Friend. Cambridge, MA: Ballinger Publishing Company, 1977.