Question: Arbitrage Pricing Theory (APT) is an alternative to CAPM. While CAMP builds up from a equilibrium model which produces the result that the market risk

Arbitrage Pricing Theory (APT) is an alternative to CAPM. While CAMP builds up from a equilibrium model which produces the result that the market risk is the only risk investors should care about, APT takes a more general view that investors care about certain risks (for which they want extra return) and there absence of arbitrage. Read the following article and discuss whether you would rather use CAPM or APT in determining the rate of discount for a stock's dividends?

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