Jensen corporate finance

  • What is jensen?

    The Jensen's measure, or Jensen's alpha, is a risk-adjusted performance measure that represents the average return on a portfolio or investment, above or below that predicted by the capital asset pricing model (CAPM), given the portfolio's or investment's beta and the average market return..

  • What is the Jensen cash flow theory?

    The theory proposed by Jensen in 1986.
    Free cash flow is cash flow in excess of that required to fund all projects that have positive net present values when discounted at the relevant cost of capital..

  • What is the Jensen formula for portfolio?

    The Jensen's alpha aims to do this and is calculated using a simple formula: Jensen's alpha = Portfolio return - [Risk Free Rate + Portfolio Beta * (Market Return - Risk Free Rate)]..

  • A company may borrow from commercial banks and other financial intermediaries or may issue debt securities in the capital markets through investment banks.
    A company may also choose to sell stocks to equity investors, especially when it needs large amounts of capital for business expansions.
  • The Jensen's Alpha can help investors determine if the return an asset is generating on average is acceptable compared to the risks it is offering, which is commonly known as risk-adjusted return.
    A positive alpha indicating an abnormal return is what investors are looking for when they are using this formula.
Jensen Corporate Finance AB, Södergatan 3, 211 34 Malmö, Sweden. Contact +46 (0) 730 87 80 30, johan@jensencf.com, www.jensencf.com.
The Jensen's measure, or Jensen's alpha, is a risk-adjusted performance measure that represents the average return on a portfolio or investment, 
The Jensen Prize is an annual prize given to authors with the best corporate finance and organizations research papers published in the Journal of Financial Economics.
The award is named after Michael Jensen, a co-founding advisory editor of the journal.

American economist

Michael Cole Mike Jensen is an American economist who works in the area of financial economics.
Between 2000 and 2009 he worked for the Monitor Company Group,
a strategy-consulting firm which became Monitor Deloitte
in 2013.
He holds the position of Jesse Isidor Straus Professor of Business Administration, Emeritus, at Harvard University.

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