Corporate Finance
Corporate Finance
3rd Edition
ISBN: 9780132992473
Author: Jonathan Berk, Peter DeMarzo
Publisher: Prentice Hall
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Chapter 12.7, Problem 2CC
Summary Introduction

To discuss: The reasons for continually using CAPM in corporate finance when it is not a perfect measure.

Introduction:

Capital asset pricing model (CAPM) is an equation derived from the security market line that attempts to explain the relationship between the risky asset’s expected return and its beta coefficient.

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