We can determine the value of certain identifiable assets (including the value of intangible assets) from knowledge about the associated (a) initial investment, (b) comparable growth rate of investments (g), and (c) estimated longevity of annual investment flows. Intangible producing investments include research & development, software development expenses, marketing and advertising expenses.
For this purpose, CAPM (capital asset pricing model) is inapplicable to determine comparable operating rates of return for intangible assets because CAPM is designed to estimate rates of return of traded equity shares, which reflect a stream of prospective dividends plus share price variation (capital gains or loss) during a certain period, and not a prospective stream of operating profits attributed to specific intangibles.
For a given enterprise, streams of dividends and capital gains and their calculated risks (measured during a specified useful period) are unlikely to be discounted or capitalized by an operating rate of return attributed to intangible assets. Inter alia, intangible assets are not frequently traded in ask-bid exchange markets and subject to speculative capital gains (loss).