Question

Determine the cost of capital of a company by applying CAPM model that purchase government securities as per the prevaling rate in the market.The prevaling rate of securities is 9.5%. The expected return for the securities is 18%. The risk factor associated with the shares is measured at the rate of 2.5%.

Answer 1

Answer:

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The new International Cost of Capital Module provides users with guidance and data for estimating cost of capital globally. It also guides users in quantifying country risks, while explaining and documenting the decision process on their unique cross-border valuation scenario.

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Answer 2

Explanation:

The y-intercept of the SML is equal to the risk-free interest rate, while the slope is equal to the market risk premium (the market's rate of return minus the risk-free rate). The slope also represents the risk-return tradeoff at a given time. The SML is applicable to any asset.