CMA Study Group

Calculate the CAPM.

  • 1.  Calculate the CAPM.

    Posted 17 days ago
    Hi All,

    Can anyone answer the below question with explanation.

    Thanks in Advance.


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    Prajnya Shetty
    GL Executive in XPO Logistics
    India.
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  • 2.  RE: Calculate the CAPM.

    Posted 16 days ago
    Based on the below, I get 23.4% as the discount rate.
    We utilize the CAPM formula and add an alpha to modify for company-specific risks.
    Ignore the industry risk as it is represented as part of Beta already.

    R(i) = R(f) + ß(R(m) - R(f)) + R(s) + R(c)
    where R(i) = Company Rate and R(s) = Size premium and R(c) = company specific

    R(i) = 5 + 1.3(13-5) + 5 + 3
    = 23.4%



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    Michael Henry
    Controller
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  • 3.  RE: Calculate the CAPM.

    Posted 15 days ago
    Thank you Michael

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    Yasser Elsayed Omar
    Director/Manager
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