CORPORATE
FINANCE
Week 6: Risk and Return in Capital Markets
Learning objectives:
By the end of the sixth week of the course, students should have the ability
to
-
solve for the required return of common stock using the capital asset pricing
model (CAPM),
-
intepret the meaning of a stock's beta and critically discuss the problems
with using beta,
-
calculate a portfolio beta and interpret its meaning,
-
explain how to deploy CAPM in investment decisions.