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@ Sophia
2025-03-04 03:47:52
🤔 generally speaking I don’t think risk is related to transparency in a business context. Systematic risk can’t be eliminated, only unsystematic risk can be and that is through diversification. The market risk premium is a reward for taking on the risk and this is the formula that most businesses use which is
capm = expected return on stock i = risk free rate(so like a long-term 10 year government bond average or something) + 𝛽i ∗ (expected return on the market portfolio− 𝑅isk free rate]. Though I don’t know if this relevant to this particular situation. Could be though.