First Friday Book Synopsis

MARCH 31, 2014

Bob''s blog entries CAPM model David l. You may have a college senior in your family or know one or more elsewhere. If so, I hope you will share it. To read the complete article, check out other resources, and obtain WSJ subscription information, please […].

CAPM 75

CAPM Advice Blog Article 75

Strategy Driven

JANUARY 13, 2013

Anyone contemplating pursuit of their PMP or CAPM certification within the next 12 months needs to know that both the PMP and CAPM examinations will change from dependence on the PMBOK Guide® Fourth Edition to focus on the PMBOK Guide® Fifth Edition on July 31, 2013.

PMBOK 50

PMBOK CAPM Resources Business Intelligence 50

Harvard Business Review

MARCH 10, 2011

knew that firms were making heavy use of the capital asset pricing model (CAPM) to size up growth opportunities, but that the model was only as good as its inputs. But that article was written a decade ago, and still the CAPM rules — and as for how to come up with the crucial inputs to it, well, practice remains all over the map.

CAPM 15

CAPM Cost Discounted Cash Flow Cost of Capital 15

Harvard Business Review

MARCH 10, 2011

In estimating the cost of equity, nearly nine out of ten organizations use the capital asset pricing model (CAPM), which calculates the cost of equity using a risk-free rate, beta factor, and a market risk premium, each of which introduces significant variability.

Cost of Capital 15

Cost of Capital CAPM Cost Discounted Cash Flow 15

Harvard Business Review

OCTOBER 14, 2013

Early tests of CAPM came out reasonably well, and by the end of the 1970s Fama’s former student Michael Jensen was (in)famously declaring that “I believe there is no other proposition in economics which has more solid empirical evidence supporting it than the Efficient Market Hypothesis.”.

CAPM 10

CAPM Finance Price Uncertainty 10

Harvard Business Review

APRIL 2, 2014

Back in the ‘60s, people developed the capital asset pricing model [CAPM] as a way to do that. And the theory that was available then was CAPM. And in those early tests, it seemed like market prices mostly obeyed both CAPM and the efficient market hypothesis. But everybody still uses the method that came out of CAPM.

CAPM 9

CAPM Discount Price Finance 9

Harvard Business Review

JUNE 18, 2015

Furthermore, few PE investors explicitly use the capital asset price model (CAPM) to determine a cost of capital. Instead, PE investors typically target a 22% internal rate of return on their investments on average (with the vast majority of target rates of return between 20 and 25%), a return that appears to be above a CAPM-based rate.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8