Capital Asset Pricing Model (CAPM)
Definition - What does Capital Asset Pricing Model (CAPM) mean?
Divestopedia explains Capital Asset Pricing Model (CAPM)
The CAPM based rates of return represent a rate of return on equity, not a discount rate or WACC. To calculate the discount rate or WACC, the cost of debt and appropriate capital structure must be assess. A growth rate deducted from the WACC will result in a capitalization rate that can be applied to free cash flows before interest costs to determine enterprise value.
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