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The Equity Risk Premium: More Risk For Higher Returns
Learn how the expected extra return on stocks is measured and why academic studies usually estimate a low premium.
How Does Market Risk Affect the Cost of Capital?
Find out how market risk directly affects the total cost of capital, including how to use the capital asset pricing model to estimate the cost of equity.
An Introduction to OIS Discounting
Learn how OIS discounting has become part of standard valuation techniques, particularly in an uncertain, post-recession derivatives market.
Investors Need a Good WACC
Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality.
How Interest Rates Affect Property Values
Interest rates have a profound impact on the value of income-producing real estate property. Find out how interest rates affect property value.
Interest Rates and Other Factors That Affect WACC
The interest rate is one of many external factors that can change the inputs in the weighted average cost of capital (WACC) calculation.
How Do I Calculate the Cost of Equity Using Excel?
Learn how to calculate the cost of equity in Microsoft Excel using the capital asset pricing model, or CAPM, including brief definitions of each component.
CAPM Cost of Equity: Calculate Cost of Equity Using CAPM
Learn about the elements of the capital asset pricing model, and discover how to calculate a company's cost of equity financing with this formula.
How is the capital asset pricing model (CAPM) represented in the security market line (SML)?
Learn the definition of the capital asset pricing model and how CAPM is used in the calculation and graph of the security market line.
Comparing CAPM vs. Arbitrage Pricing Theory
The Capital Asset Pricing Model (CAPM) and the Arbitrage Pricing Theory (APT) help project the expected rate of return relative to risk, but they consider different variables.