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Capital Asset Pricing Model - Cost of Equity Share Capital (in Hindi)
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This video covers Capital Asset Pricing Model - Cost of Equity Share Capital.

Heena Malhotra
Believe in Conceptual Learning.

U
Unacademy user
SIR IF SOME ONE GIVES PRELIMS AT 21 AGE AND GET HIS RESULTS AT 22 AGE. THEN AT WHICH AGE HE WOULD BE CONSIDERED IAS 21 OR 22
Thank you so much, ma'am, for such nice videos. They're too good and very helpful. All good wishes to you!!
how we can calculate risk .that is beta pls xpln
M
mam updats kb krwaoge is unit k
Mam ye course graduation level pe useful hai ya nh?
Hello Ma'am What is SML in the graph?
  1. Cost of Capital By Heena Malhotra


  2. COST OF EQUITY SHARE CAPITAL-Methods O Dividend price basis O Dividend price plus growth basis O Earning/price basis O Earning/price plus growth basis O Realised Yield basis O CAPM By Heena Malhotra


  3. Capital Asset Pricing Model (CAPM) Where, - Cost of equity capital = Risk free rate of return Ke Rm (R.-R) = Beta coefficient Rate of return on market portfolio Market premium = By Heena Malhotra


  4. Calculate the cost of equity capital o H Ltd., whose risk free rate o return equals 10% The firm's beta equals 1.75 and the return on the market portfolio equals to 15%. SOLUTION 0.10 175 (0.15-0.10 0.10+175 (005) = 0.1875 or 18.75% By Heena Malhotra


  5. Equity Shares 10 9 8 7 6 5 4 3 2 1 4111] Pref. Shares Corp. Debts Govt. Bonds Risk Return relationship of various securities By Heena Malhotra


  6. Capital Asset Pricing Model (CAPM) O CAPM model describes the risk-return trade-off for securities. It describes the linear relationship between risk and return for securities. By Heena Malhotra


  7. The risks, to which a security is exposed, can be classified into two groups: (i) Unsystematic Risk: This is also called company specific risk as the risk is related with the company's performance. This type of risk can be reduced or eliminated by diversification of the securities portfolio. This is also known as diversifiable risk. (ii) Systematic Risk: It is the macro-economic or market specific risk under which a company operates. This type of risk cannot be eliminated by the diversification hence, it is non-diversifiable. The examples are inflation, Government policy, interest rate etc. As diversifiable risk can be eliminated by an investor through diversification, the non- diversifiable risk is the risk which cannot be eliminated; therefore a business should be concerned as per CAPM method, solely with non-diversifiable risk The non-diversifiable risks are assessed in terms of beta coefficient (b or B) through fitting regression equation between return of a security and the return on a market portfolio. By Heena Malhotra


  8. Required return SML Risk premium Risk (Rm-R)P Rf Risk (B) Cost of Equity under CAPM By Heena Malhotra


  9. Cost of Capital Cost of Retained Cost and Weight Earning Cost of Combination of Cost of Equity Cost of Debt Preference Share of each sources of Capital Weighted Average Cost of Capital (WACC) By Heena Malhotra