Question

6. Multifactor asset pricing model that can be used to estimate the
financial asset.
rate for the valuation of financial asset​

Answer 1

Answer:

The valuation of a financial involves the following three steps :

(1) estimate the expected cash flows .

(2) determine the appropriate interest rate or interest rates that should be used to discount the cash flows .

(3) calculate the present value of the expected cash flows using the interest rates .