Since Equity Cash Flows Are Uncertain, the Following Approaches Are

question 30

Multiple Choice

Since equity cash flows are uncertain, the following approaches are used in estimating the cost of equity:

• A)CAPM and the dividend growth model.
• B)risk premiums, the dividend growth model, and the accounting beta method.
• C)the dividend growth model, risk premiums, and CAPM.
• D)All of the methods mentioned above are used, but CAPM is unquestionably the best.

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Definitions:

Inherent Contradictions

Fundamental conflicts or inconsistencies within theories, propositions, situations, or within the nature of things that are often difficult to resolve.

Different Perspectives

Refers to the concept of considering and understanding viewpoints or positions different from one's own, crucial in diverse and multi-faceted environments.

Prevalence Rate

A statistical measure that represents the proportion of individuals within a population who have a specific trait or condition at a given time.

Mental Health

A state of well-being in which an individual realizes his or her own abilities, can cope with the normal stresses of life, work productively, and contribute to their community.