Implementation of the CAPM Model in Equity Price Determination in the Republic of Srpska
Journal Title: Acta Economica - Year 2013, Vol 11, Issue 19
Abstract
CAPM (Capital Assets Pricing Model) has been developed by William Shape, John Lintner and Jan Mossion in the early 1960s, on foundations of earlier works of Harry Markowiz and the model it self is in the core of economics’ theory and modern finance. Model was introduced by William Shape, who received Nobel prize in economics in 1990. This model of equity assessment enables investors to forecast precise risk and yield relation in financial instrument and it is being used in three main purposes. First, enables investors to calculate the expected rate of return of financial instrument. Second, CAPM assist in share price determination in initial public offering (IPO). Third use of CAPM is determination of equity price as own source of funding. Although the model is not empirically verifed and it is the subject of critiques by some authors, its use is broad because of precise determination of risk and yield relation in financial instruments and his appropriate accuracy.
Authors and Affiliations
Драган Јањић
Keywords
Related Articles
- EP ID EP43781
- DOI -
- Views 284
- Downloads 0
NET CASH FROM THE BUSINESS ACTIVITY – THE INSTRUMENT FOR MEASURING THE QUALITY OF BUSINESS GAIN
Introducing of the fair value have led to acknowledging and presentation in the income statement of the gains that were not market-verified, which have resulted in increased difference between the amount of the business...
THE WORLD OF THE ELECTRONIC BUSINESS AND SAFETY - SECURITY PROBLEMS
A main queston related to any crypto-sistem is the security of cryptographic informatio protection which assumes the degree of the system resistance against cryptoanalytic attaks. Two basic elements determine the criptos...
Innovative Reporting About Corporation Business
In ideal case currently financial-account model should be extended with value of not material and intellectual company assets as high quality products and services, stimulate and qualify staffs, predictable internal proc...
Scientific research and horizons of knowledge
Intellectual climate has served for development of the economy based on knowledge. But did only the knowledge from the economy seve for the development of economic knowledge? Knowledge can’t be transplanted but it can be...
THE PROMOTION OF EXPORT AS BASIC POSTULATION OF LONGTERM STRATEGY OF DEVELOPMENT (EXAMPLE OF BOSNIA AND HERZEGOVINA)
The final goal of national economic policy is an increase of life standard of the population. Theory explains and economic events confirm positive effects of export on economic development. The strategy of growth of o...