In Applying the CAPM to Estimate the Cost of Equity $\beta$

question 80

Multiple Choice

In applying the CAPM to estimate the cost of equity capital, which of the following elements is not subject to dispute or controversy?

• A) Expected rate of return on the market, rM.
• B) The share's beta coefficient, (\(\beta\)). i.
• C) Risk-free rate, rRF.
• D) Market risk premium (MRP).
• E) All of the above are subject to dispute.

---

Definitions:

Induction

A discipline technique in which a parent uses reasoning and explains how the child’s actions are likely to affect others.

Squirt Gun

A water gun or toy that squirts water, often used for play or recreation.

Global Empathy

The ability to understand and share the feelings of others from diverse cultures and backgrounds, fostering a sense of interconnectedness and compassion on a worldwide scale.

Empathic Response

The ability or act of understanding, sharing, and responding to the emotional state of another individual.