Systematic risk and assessment of investment projects profitability
Journal Title: Acta Economica - Year 2013, Vol 11, Issue 18
Abstract
In the article is, first of all, considered weighted average cost of capital (WACC) as criteria for estimation profitability of investments. Afterwards, it is considered the Capital Asset Princing Model offering explanation for invested equity return correlation and systematic risk. Ten it is analyzed connection between these two models in regard to direct connection of required rates of return on debt and equity with their beta coefficients. It is also stated that required rates of return affirmed by usage of the Capital Asset Princing Model can, under certain conditions, be used as criteria for estimation profitability of investments.
Authors and Affiliations
Милорад Иванишевић
Keywords
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- EP ID EP43758
- DOI https://doi.org/10.7251/ACE1318105I
- Views 288
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