The Text Identifies Three Methods for Estimating the Cost of Common

question 38

True/False

The text identifies three methods for estimating the cost of common stock from retained earnings: the CAPM method,the DCF method,and the bond-yield-plus-risk-premium method.However,only the DCF method is widely used in practice.

---

Definitions:

Ego

Refers to the part of the mind that mediates between the conscious and the unconscious and is responsible for reality testing and a sense of personal identity.

Reality Principle

The concept in psychoanalytic theory that the mind functions to mediate between the demanding needs of the id and the external real world.

Ego

In psychoanalytic theory, the part of the mind that mediates between the conscious and the unconscious and is responsible for reality testing and a sense of personal identity.

Personality

The combination of emotional, attitudinal, and behavioral response patterns of an individual, defining their character and psychological identity.