CFA - Equity

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CAPM

Required Return on Stock = R_f + Beta(Equity Risk Premium)

Equity risk premium = Expected Market Return - R_f
Multi-Factor Model for determining required return on stock

required return = R_f + (risk premium)₁ + (rish premium)₂ + ... + (risk premium)_n

Risk Premium = (factor sensitivity)_i * (factor risk premium)_i
Fama - French

Required return on stock = RF + Beta_mkt(R_mkt - RF) + Beta_smb(R_small - R_big) + Beta_hml(R_hbm - R_lbm)
Pastor-Stambaugh Model

Fama-French + Beta_liquidity(R_liquidity)
Build Up Method

Required Return = RF + equity risk premium + size premium + specific company premium
Bond Yield Plus Risk Premium

Required return = YTM + risk premium
Adjusted Beta

(2/3 * regression Beta) + (1/3 * 1)
WACC

W_d * r_d * (1 - tax rate) + W_e * r_e