IJEFSD
Vol. 6 No. 2 (2024): International Journal on Economics, Finance and Sustainable Development (IJEFSD

Impact of Market Risk Premium on Share Fair Value

Alasadi, Bushra Mohamed Sami (Unknown)



Article Info

Publish Date
31 May 2024

Abstract

This research investigates how the market risk premium influences the fair value of shares traded on the Iraq Stock Exchange using the CAPM model to estimate the required rate of return. The study incorporates the risk-free rate (RF), market portfolio return (RM), and beta-processed risk premium. It addresses the knowledge gap in understanding the risk premium's impact on fair value calculation, a crucial component of the required rate of return. Employing statistical methods, including correlation coefficient measurement and simple and multiple regression analyses, the study demonstrates a significant one-to-one relationship between the risk premium and shares' intrinsic value. These findings have important implications for investors and financial analysts in accurately assessing share values based on market risk premiums.

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Journal Info

Abbrev

IJEFSD

Publisher

Subject

Economics, Econometrics & Finance

Description

International Journal on Economics, Finance and Sustainable Development (IJEFSD) is an international, peer-reviewed, and scholarly journal aimed at being a platform for interdisciplinary researchers across the globe to develop and advance both theory and practice of economics and finance while ...