What is Capital Asset Pricing Mode (CAPM) | with Calculation Examples

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Counttuts

Counttuts

Күн бұрын

In this lesson, we explain what Capital Asset Pricing Model (CAPM) is, why we calculate it, and go through the formula of how to calculate the cost of equity (ordinary shares) using the Capital Asset Pricing Model (CAPM). We go through some examples and also show how to solve for the risk-free rate.
Risk-Free Rate Explained: • Risk Free Rate Explained
Systematic Risk vs Unsystematic Risk | Explained with Examples: • Systematic Risk vs Uns...
Beta Coefficient | Explained with Examples: • Beta Coefficient | Exp...
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Пікірлер: 31
@johnjameson6449
@johnjameson6449 2 жыл бұрын
maaan, i was struggling to understand this topic. u explained it just like that. thank you. u got my like : )
@hungarianmenace
@hungarianmenace 3 жыл бұрын
Thank you so much for clarifying CAPM.
@adamcham9175
@adamcham9175 Жыл бұрын
Brief and precise ❤ thanks you!
@julcsiharsanyi3938
@julcsiharsanyi3938 2 жыл бұрын
This video was super helpful, i found exactly what I needed thank you so much :))
@decisivewin
@decisivewin 2 жыл бұрын
Your teaching visuals are very organized and your explanations are very clear, thank you.
@cukijn8131
@cukijn8131 2 жыл бұрын
Exactly
@honeyhlaing5339
@honeyhlaing5339 2 жыл бұрын
thanks for your detailed information and explaination
@benscandvin9458
@benscandvin9458 2 жыл бұрын
Very nice presentation!!
@talentselemani6806
@talentselemani6806 2 жыл бұрын
Very helpful indeed
@upendrah4548
@upendrah4548 3 жыл бұрын
Tq so much sir for clearing the CAPM And eassy understanding sir tq
@shytoninnocentdube8268
@shytoninnocentdube8268 4 жыл бұрын
Helpful thank you....
@snb1143
@snb1143 3 жыл бұрын
thanks for an excellant video
@ReturnOfGodEnel
@ReturnOfGodEnel Жыл бұрын
Thank you so much this helps a ton I can’t understand my professor
@carenasemerel1953
@carenasemerel1953 Жыл бұрын
Thank you..👏🏾
@zxxxrain8070
@zxxxrain8070 4 жыл бұрын
Thanks alot
@olyneannie4739
@olyneannie4739 3 ай бұрын
Made my life easier ❤
@aishwaryakulkarni3044
@aishwaryakulkarni3044 Жыл бұрын
Thanks 🙏
@ZahidAli-ur8lv
@ZahidAli-ur8lv 14 күн бұрын
Cost of equity = expected return...never heard of it 😮
@lawrencenjobvuyalema1795
@lawrencenjobvuyalema1795 4 ай бұрын
Nice
@AOSGAMINGNEWS
@AOSGAMINGNEWS 4 жыл бұрын
Hello, could you explain to me the risk-free return? Every example that I have ever seen lists the risk free return as the risk free return instead of the T-Bill rate? I just like to know 100 percent that I am correct. Can you correct me if I'm wrong? Let's say the T-Bill rate is 2 percent. The Expected Market Return is 8 percent. Beta is 2.2 . Am I still able to calculate expected return as the T-Bill yield is 2 percent? And the reason why the risk-free rate is a part of the CAPM equation is because it's the compensation that an investor gets for putting money into a company for a period of time and taking on the risk, instead of just putting that money into long term government bonds or T-Bills? Also, why is the risk free rate subtracted from the market premium? As I understand the other side of the equation (Beta*Market Risk Premium) represents additional risk. I understand that without the risk free rate that would mean a higher expected return. Fundamentally, why do we subtract the risk free return to get the market risk premium?
@Counttuts
@Counttuts 4 жыл бұрын
Hello there, Check out the lesson on the Risk-Free Rate here: kzfaq.info/get/bejne/p82ieK6g3rGyhZs.html
@Astridah_M
@Astridah_M 2 жыл бұрын
Hey thanks for this detailed video, it was very helpful. Am I the only one who found RF = 0.5 because (-02/-0.4) = 0.5 . how did you find RF= 2?
@faith5418
@faith5418 2 жыл бұрын
-0.4/-0.2 = 2
@domhnallodubhlainn7476
@domhnallodubhlainn7476 3 жыл бұрын
Your videos are excellent. Thanks for sharing them. Can someone just tell me why we need to include the risk-free rate in this calculation for the expected rate of return? How or why does the risk free rate (i.e. gov bond yields) effect the performace of a stock floating on the market? There appears to be no real life relationship between the two as far as I can think?
@Counttuts
@Counttuts 3 жыл бұрын
See here: kzfaq.info/get/bejne/p82ieK6g3rGyhZs.html
@maryaluoch7795
@maryaluoch7795 3 жыл бұрын
Hello can't see the link
@Counttuts
@Counttuts 3 жыл бұрын
Good day, which link are you referring to?
@triplem908
@triplem908 2 жыл бұрын
how you get the 0.2
@TheLoxionKasie
@TheLoxionKasie Жыл бұрын
1.2RF-RF=1.2RF-1RF=0.2RF
@Leerangwani
@Leerangwani 3 жыл бұрын
Rf-1.2Rf= -0.2? Is the math correct there?
@talia1884
@talia1884 3 жыл бұрын
Yes it's like you take one a whole number then you subtract 1.2 from it... (1-1.2) You will get -0.2
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