Which of the following is a common use of capital asset pricing model (CAPM)?

The capital asset pricing model (CAPM) is widely used in finance to estimate the expected return on an asset based on its risk relative to the market. This model considers the risk-free rate of return, the expected return of the market, and the asset's beta, which measures the sensitivity of the asset's returns to market movements. By applying the CAPM formula, investors can determine what return they should expect for the level of risk they are taking on, helping them make informed investment decisions.

In contrast, other choices focus on different financial aspects. Analyzing capital structure pertains to the way a company finances its operations through debt and equity, rather than assessing individual asset returns. Similarly, assessing financial liabilities involves evaluating a company’s obligations and debts, which is outside the scope of CAPM. Lastly, calculating net income is a measure of profitability, focused on earnings rather than return expectations based on risk. Thus, the use of CAPM is specifically aligned with estimating expected returns, making it the correct answer.