How to Measure the Cost of Capital

"According to various surveys on international financial policies and practices, the most commonly used to estimate the cost of shareholders’ resources is the Capital Asset Pricing Model , known as CAPM for short."

The CAPM is a model used to calculate the price of an asset or a portfolio of investments. For individual assets, it uses the security market line (SML) (which represents the expected return of all assets in a market as a function of undiversifiable risk) and its relation to the expected return and systematic risk (beta), to show how the market should estimate the price of a single asset, relative to the class to which it belongs. (Wikipedia)

An article by Luis Sanz in Elfinancierocr.com, shows how this model, despite the problems that occur frequently in emerging countries in providing the necessary information, can be used successfully by making the necessary adjustments.

Source: elfinancierocr.com

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Venture Capital Funds in Costa Rica

November 2011

The primary objective of this scheme is the temporary investment in private bonds of recommended companies, which have not been registered on a stock market over the past five years.

Costa Rica’s National Council of Financial System Supervision approved the regulations covering the operation of the long-awaited Venture Capital Funds.