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The capital asset pricing model approach to equity valuation: Is dependent upon the unsystematic risk of a security. Assumes the reward-to-risk ratio increases as beta

The capital asset pricing model approach to equity valuation:

Is dependent upon the unsystematic risk of a security.
Assumes the reward-to-risk ratio increases as beta increases.
Can only be applied to dividend-paying firms.
Assumes a firms future risks will be higher than its current risks.
Assumes the reward-to-risk ratio is constant.

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