Which of the Following Methods of Estimating the Cost of Common

question 57

Multiple Choice

Which of the following methods of estimating the cost of common equity for a firm treats risk explicitly?

• A) DCF method.
• B) CAPM method.
• C) Composite method.
• D) Bond-yield-plus-risk-premium method.
• E) Answers b and d are correct.

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Definitions:

Endocrine Glands

Glands that secrete hormones directly into the bloodstream to regulate various body functions.

Variety of Hormones

Refers to the diverse group of chemical messengers produced by endocrine glands that regulate bodily functions, including growth, metabolism, and reproduction.

Short-Term Memory

The part of the memory system where small amounts of information can be stored for brief periods.

Primary Tasks

The main or central duties and responsibilities that need to be executed within a role or job.