We use cookies to give you the best experience possible. By continuing we’ll assume you’re on board with our cookie policy

Summative Essay Essay

Words: 218, Paragraphs: 7, Pages: 1

Paper type: Essay

Corporate Finance Summative Paper Using Capital Asset Pricing Model and The weighted Average Cost of Capital

There are various methods that can be used in estimating the the returns of assets. Most of these asset projection techniques are covered in financial time series analysis. The return of the assets can be estimated with the aid of the Capital Asset Pricing Model (CAPM), according to which: the return on the asset = risk free rate + beta x (expected return on the market risk free rate)

Description of ‘Capital Asset Pricing Model -CAPM’

CAPM is a primary tool that can be used to tackle assignments that seek to investigate the relationship between risk and expected returns.

A calculation of a firm’s cost of capital in which each category of capital is proportionately weighted.

Summative Essay

Don't use plagiarized sources. Get Your Custom Essay on Summative Essay
Just from $13,9/Page

Get Essay

Where: Re = cost of equity Rd = cost of debt E = market value of the firm’s equity D = market value of the firm’s debt V = E + D E/V = percentage of financing that is equity D/V = percentage of financing that is debt Tc = corporate tax rate

Businesses often discount cash flows at WACC to determine the Net Present Value (NPV) of a project, using the formula:

NPV = Present Value (PV) of the Cash Flows discounted at WACC.

About the author

This paper is written by Sebastian He is a student at the University of Pennsylvania, Philadelphia, PA; his major is Business. All the content of this paper is his perspective on Summative Essay and should be used only as a possible source of ideas.

Sebastian other papers:

How to cite this page

Choose cite format:

Summative Essay. (2019, Dec 05). Retrieved from https://paperap.com/paper-on-summative-essay-on-corporate-finance/

Is Your Deadline Too Short?
Let Professionals Help You

Get Help

Our customer support team is available Monday-Friday 9am-5pm EST. If you contact us after hours, we'll get back to you in 24 hours or less.

By clicking "Send Message", you agree to our terms of service and privacy policy. We'll occasionally send you account related and promo emails.
No results found for “ image
Try Our service

Hi, I am Colleen from Paperap.

Hi there, would you like to get such a paper? How about receiving a customized one? Click to learn more https://goo.gl/CYf83b