The CAPM Cost of Capital in the Present Value Formula Homework Help

Personalized homework help to elevate your understanding and boost your grades. Dive into a world where learning becomes easy, and complex topics transform into simple solutions.
  • ο‡š24/7 Assistance
  • ξ€³Expert Tutors
  • ο‚‘Guaranteed Results

The CAPM Cost of Capital in the Present Value Formula Assignment Help

Hire Online Help to Complete Your Present Value Formula Homework

It is also known as discounted value is the current worth of a future cash flow. Future flow of money is discounted and the higher the rate, the lower the present value. For example, If you receive $5000 in the future then its current value won’t be $5000 as it is not at hand in the present. To determine the present value of a future cash flow of $5000 we have to find out what needs to be invested today in obtaining a future cash flow of $5000.

To determine the present value, we must subtract the accumulated interest over a particular period.

By Formulae: PV=FV/ (1+I)^n.

Where PV=Present Value,

FV=Future Value

I=Rate of Interest

N=No of years.

Log on now to myhomeworkhelp.com to avail The CAPM Cost of Capital in the Present Value Formula Assignment help and stay ahead of your competition!

What is Cost of Capital?

It is the return rate that the suppliers of capital that is the bondholders and owners require as compensation for their contributions towards the capital.

The Cost of Capital shows the opportunity costs of investors of capital.

It is also referred as the marginal cost which is the cost of raising more capital.

What is Capital Asset Pricing Model (CAPM)?

The Capital Asset Pricing Model is used to determine the rate of return on a risky asset. It ascertains the relation between systemic risk and expected rate of returns. It determines expected returns of assets with the risk of those assets and also calculates the cost of capital. It can be used both for pricing a portfolio or an individual security. This basic understanding is pivotal to The CAPM Cost of Capital in the Present Value Formula Homework help.

How to use CAPM Cost of Capital to determine the present value factor of equity:

The CAPM Pricing Model defines the required return for a specified level of risk.

The CAPM Pricing Model requires three inputs, and they are:

  • Risk Free Return
  • The Rate of Return from the Market- the market where the stock in question is being traded
  • The beta value the risk level-b>1 signifies risk higher than the market average and b<1 implies risk below market average. Most companies lie in the 0.75 to 1.50 range.

By Formulae:

Equity Cost = Risk-Free Rate + Beta * (Rate of Return from market- Risk-Free Rate). This formula will be very useful with The CAPM Cost of Capital in the Present Value Formula Assignment help.

Consider the following information:

Risk-free rate of return = 5%

Average Market Return = 6%

Beta value of RD Co = 1.3

Using the CAPM formulae:

r* = KRF + b(KM – KRF)= 5 + (1.3 x 6) = 12.8%

The CAPM predicts that the cost of equity at 12.8%.

Contact us to hire our services

Contact us now at myhomeworkhelp.com and learn all the intricacies associated with The CAPM Cost of Capital in the Present Value Formula Homework help. No longer will you have troubles tackling tough topics like these. In fact, with the guidance of our experts, you will start enjoying and actually learn the important topics. So, not only will you be able to complete your homework on time, but you will also gain a better understanding of the concerned topic. Now, that is definitely something worth it. Hire our online homework help services now.

Download Our Solved Homework Solutions πŸ“š

Curious about the level of quality we deliver? Navigate through our carefully curated selection of solved assignments, neatly organized by subject and level. This is a great way to get a feel for our service before you submit your own assignments.

Go ahead, download, review, and let us help you excel! πŸš€

Accounting Homework

Corporate Accounting Sample

Biology Homework

Genetics Assignment Sample

Essay Writing Help

Business Plan Homework Sample

Statistics Homework

SPSS Assignment Sample

Score High with Our Experts

At MyHomeworkHelp, our experts are alumni from world-class universities and colleges. Each candidate undergoes a stringent check of their academic prowess and professional history before joining us as expert.

Hear It From Our Students

Real stories from students who’ve experienced our high-quality assistance. Discover how we’ve helped them excel!

Got Questions? We’ve Got Answers

How do I submit my homework?
K
L
Click on the "Get Help NowπŸš€" button at the top of our website. Fill in the required details about your assignment and our team will get back to you within 15 minutes with a free quote.
Is there a guarantee on the quality of work?
K
L
Absolutely! We ensure top-quality assistance. If you're unsatisfied with the results, we offer revisions and a money-back guarantee based on certain conditions.
How quickly can I expect my completed assignment?
K
L
Our experts work diligently to meet your deadlines. Depending on the complexity, we usually deliver assignments within the stipulated time mentioned in the quote.
Who are the experts assisting me?
K
L
Our team comprises professionals with academic expertise in various fields. Each expert is thoroughly vetted and has a track record of delivering excellence.
What if I need revisions?
K
L
Your satisfaction is our priority. If you need any revisions, contact us with the specific changes, and our experts will address them promptly.
How do you ensure the privacy of my information?
K
L
We take privacy seriously. All your data is encrypted and we follow strict confidentiality protocols. Your personal and assignment details will never be shared with third parties.