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  2. Capital asset pricing model - Wikipedia

    en.wikipedia.org/wiki/Capital_asset_pricing_model

    An estimation of the CAPM and the security market line (purple) for the Dow Jones Industrial Average over 3 years for monthly data. In finance, the capital asset pricing model (CAPM) is a model used to determine a theoretically appropriate required rate of return of an asset, to make decisions about adding assets to a well-diversified portfolio.

  3. Roll's critique - Wikipedia

    en.wikipedia.org/wiki/Roll's_critique

    Mean-variance efficiency of the market portfolio is equivalent to the CAPM equation holding. This statement is a mathematical fact, requiring no model assumptions. Given a proxy for the market portfolio, testing the CAPM equation is equivalent to testing mean-variance efficiency of the portfolio.

  4. Valuation using discounted cash flows - Wikipedia

    en.wikipedia.org/wiki/Valuation_using_discounted...

    FCFF is the free cash flow to the firm (essentially operating cash flow minus capital expenditures) as reduced for tax; WACC is the weighted average cost of capital, combining the cost of equity and the after-tax cost of debt; t is the time period; n is the number of time periods to "maturity" or exit; g is the sustainable growth rate at that point

  5. What is the Capital Asset Pricing Model (CAPM)? - AOL

    www.aol.com/finance/capital-asset-pricing-model...

    CAPM assumes that investors are looking to maximize their return and that they can evaluate expected return and risk. It also assumes that investors have access to risk-free borrowing and lending.

  6. Weighted average cost of capital - Wikipedia

    en.wikipedia.org/wiki/Weighted_average_cost_of...

    The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Importantly, it is dictated by the external market and not by management.

  7. Modigliani–Miller theorem - Wikipedia

    en.wikipedia.org/wiki/Modigliani–Miller_theorem

    The same relationship as earlier described stating that the cost of equity rises with leverage, because the risk to equity rises, still holds. The formula, however, has implications for the difference with the WACC. Their second attempt on capital structure included taxes has identified that as the level of gearing increases by replacing equity ...

  8. 3 Dividend-Paying Value Stocks to Buy Even If There's a Stock ...

    www.aol.com/3-dividend-paying-value-stocks...

    Image source: Getty Images. 1. Lockheed Martin. After its stock price reached an all-time high earlier this year, Lockheed Martin and its defense contractor peers have sold off considerably over ...

  9. Baby was 'unaccounted for' after deadly car crash. Police now ...

    www.aol.com/baby-unaccounted-deadly-car-crash...

    Authorities have arrested the grandfather of a 1-year-old boy who was unaccounted for after a Dec. 8 crash that killed two of his family members and critically injured his mother.