The Usefulness of The Capital Asset Pricing Model in Predicting Total Shareholder Return
This research aims to study the usefulness of CAPM in predicting total shareholders return, and its effectiveness in a UK-listed stock portfolio. Pearson Co. chose to compute the equity cost by calculating total shareholder return (TSR) using appropriate dividend yields and capital gains along with...
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| Format: | Article |
| Language: | Arabic |
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Salahaddin University-Erbil
2023-02-01
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| Series: | Zanco Journal of Humanity Sciences |
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| Online Access: | https://zancojournal.su.edu.krd/index.php/JAHS/article/view/516 |
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| _version_ | 1849331299533193216 |
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| author | Chnar Abdullah Rashid Rizgar Abdullah Sabir Jaf |
| author_facet | Chnar Abdullah Rashid Rizgar Abdullah Sabir Jaf |
| author_sort | Chnar Abdullah Rashid |
| collection | DOAJ |
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This research aims to study the usefulness of CAPM in predicting total shareholders return, and its effectiveness in a UK-listed stock portfolio. Pearson Co. chose to compute the equity cost by calculating total shareholder return (TSR) using appropriate dividend yields and capital gains along with the CAPM and related data. This was done within the framework of 2016 to 2021 according to Pearson's financial reports. It was concluded that CAPM is suitable as a UK share price indicator. It demonstrates that CAPM is linear but does not need to capture unique and systematic risks. CAPM can be used by managers as a proxy to evaluate stock returns and diversify portfolios in order to minimise unsystematic risk, so they can implement the right policies in management to maximize profits while increasing shareholder wealth.
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| format | Article |
| id | doaj-art-ef3a171f04684da78ae7f02b162d734c |
| institution | Kabale University |
| issn | 2412-396X |
| language | Arabic |
| publishDate | 2023-02-01 |
| publisher | Salahaddin University-Erbil |
| record_format | Article |
| series | Zanco Journal of Humanity Sciences |
| spelling | doaj-art-ef3a171f04684da78ae7f02b162d734c2025-08-20T03:46:38ZaraSalahaddin University-ErbilZanco Journal of Humanity Sciences2412-396X2023-02-0127110.21271/zjhs.27.1.25The Usefulness of The Capital Asset Pricing Model in Predicting Total Shareholder ReturnChnar Abdullah Rashid 0Rizgar Abdullah Sabir Jaf1Department of Accounting Technique, Technical College of Administration, Sulaimani Polytechnic University-Sulaimani Department of Accounting, College of Administration and Economic, Salahaddin University-Erbil This research aims to study the usefulness of CAPM in predicting total shareholders return, and its effectiveness in a UK-listed stock portfolio. Pearson Co. chose to compute the equity cost by calculating total shareholder return (TSR) using appropriate dividend yields and capital gains along with the CAPM and related data. This was done within the framework of 2016 to 2021 according to Pearson's financial reports. It was concluded that CAPM is suitable as a UK share price indicator. It demonstrates that CAPM is linear but does not need to capture unique and systematic risks. CAPM can be used by managers as a proxy to evaluate stock returns and diversify portfolios in order to minimise unsystematic risk, so they can implement the right policies in management to maximize profits while increasing shareholder wealth. https://zancojournal.su.edu.krd/index.php/JAHS/article/view/516CAPM, abnormal returns (Ab. R), and Cost of equity. |
| spellingShingle | Chnar Abdullah Rashid Rizgar Abdullah Sabir Jaf The Usefulness of The Capital Asset Pricing Model in Predicting Total Shareholder Return Zanco Journal of Humanity Sciences CAPM, abnormal returns (Ab. R), and Cost of equity. |
| title | The Usefulness of The Capital Asset Pricing Model in Predicting Total Shareholder Return |
| title_full | The Usefulness of The Capital Asset Pricing Model in Predicting Total Shareholder Return |
| title_fullStr | The Usefulness of The Capital Asset Pricing Model in Predicting Total Shareholder Return |
| title_full_unstemmed | The Usefulness of The Capital Asset Pricing Model in Predicting Total Shareholder Return |
| title_short | The Usefulness of The Capital Asset Pricing Model in Predicting Total Shareholder Return |
| title_sort | usefulness of the capital asset pricing model in predicting total shareholder return |
| topic | CAPM, abnormal returns (Ab. R), and Cost of equity. |
| url | https://zancojournal.su.edu.krd/index.php/JAHS/article/view/516 |
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