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Dell tumbled 11%, with the company set to shed about $11 billion from its $99.50 billion market value, after it forecast quarterly revenue below estimates. HP dropped about 5% and its market ...
Carl Icahn and partner Southeastern Capital Management will offer Dell Inc. (NASDAQ: DELL) stockholders two alternatives, if their deal to takeover the company is chosen by its board. Investors ...
The risk premium is used extensively in finance in areas such as asset pricing, portfolio allocation and risk management. [2] Two fundamental aspects of finance, being equity and debt instruments, require the use and interpretation of associated risk premiums with the inputs for each explained below:
The market risk premium is determined from the slope of the SML. The relationship between β and required return is plotted on the security market line (SML), which shows expected return as a function of β. The intercept is the nominal risk-free rate available for the market, while the slope is the market premium, E(R m)− R f. The security ...
The term () represents the movement of the market modified by the stock's beta, while represents the unsystematic risk of the security due to firm-specific factors. Macroeconomic events, such as changes in interest rates or the cost of labor, causes the systematic risk that affects the returns of all stocks, and the firm-specific events are the ...
Shares of Dell fell as low as $12.71 on Friday, even as founder Michael Dell's proposal to buy the company for $13.65 goes before shareholders two weeks from now. At first glance, Dell might seem ...
Risk premium is the added return that investors expect to earn from an asset such as a share of stock that carries more risk than another asset such as a high-grade corporate bond. The risk ...
The Capital Market Line says that the return from a portfolio is the risk-free rate plus risk premium. Risk premium is the product of the market price of risk and the quantity of risk, and the risk is the standard deviation of the portfolio. The CML equation is : R P = I RF + (R M – I RF)σ P /σ M. where, R P = expected return of portfolio