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8/12/2019 Adv Corporate Finance Paper Final
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I. Introduction
To determine the relevance of the given topic we need to define what is and what the goals of
empirical research are. An empirical research is a scientific study which is based on facts.
Any scientific research starts with the collection, classification and generalization of the facts.
The concept of "fact" has the following major meanings:
1 !ome fragment of reality, objective events, the results that based on either to the
objective reality "facts of reality" , or to the realm of consciousness and #nowledge
"facts of consciousness" $
% &nowledge of any event, phenomenon, which credibility is proved$
' Any assumptions or suggestions that fi(ing empirical #nowledge which received
during e(periments and observations.
The internal structure of empirical level is formed into two sublevels:
a )irect observation and e(periments which result are referred to these observations$
b *y means of cognitive procedures, transition from observations to empirical
dependences and facts is carried out.
The activity+based nature of empirical research at level of observation is most distinctly
shown in situations when observation is carried out during real e(periment. *y tradition, the
e(periment is opposed to observation which is out of e(periment. et-s note that a core of
empirical research is an e(periment test of the studied phenomena in controllable and
manageable conditions. The distinction between an e(perimentation and observation is that
e(perimental conditions are controlled and managed, but in observation the processes are
given based on the natural course of events. /ithout denying specifics of these two types of
cognitive activities, it is necessary to pay attention to their common generic features. 0irst of
all we need to consider in more detail what the feature of e(perimental research as practical
activity is. (perimental wor# is a specific form of natural interaction, and interactive
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fragments of the nature in the e(periment always appear as objects with functionally allocated
properties. This term paper addresses such e(perimental research activities for three
&aza#hstan big companies based on the analysis of 2apital Asset 3ricing 4odel. At the
present time the concept of 2apital Asset 3ricing 4odel is the #ey to corporate finance, as it
allows giving 5uantitative assessment to the investment and credit ris# of the owners of
capital of company in terms of profitability and building the adoption of effective investment
and financial decisions based on this assessment.
A. Objective
The main goal of this term paper is e(periments on the application of the concept of 6ris#+
return7 and to determine its suitability due to changes in country ris# and mar#ets. The object
of the term paper is three &aza#hstan companies which are listed on ondon !toc# (change
that are, &aza#hmys plc, 89A &4;
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>ne of the main limitations of this paper is an absence of necessary data which may result in
inaccuracy of estimations. 4oreover, little information is available to the general public
regarding closing price of stoc#s in national currency for &aza#hstan oil and gas sector. All
these factors served as challenge for the research group to ma#e a careful analysis.
II. Concept, essence and purpose of the CAPM
2apital Asset 3ricing 4odel 2A34 + model of an assessment of profitability of financial
assets which serves a theoretical basis for a number of various financial technologies on
management of profitability and the ris#, applied at long+term and medium+term investment
on assets.
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