When Estimating a Firm's Cost of Equity Capital Using the CAPM

question 44

Multiple Choice

When estimating a firm's cost of equity capital using the CAPM, you need to estimate:

• A) the risk-free rate of return.
• B) the expected return on the market portfolio.
• C) the firm's beta.
• D) all of the above

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Definitions:

Milliliters

A unit of volume in the metric system, equivalent to one-thousandth of a liter, used to measure liquids or gases.

Liters

A metric unit of volume equal to one cubic decimeter or 1,000 cubic centimeters, often used for measuring liquids.

Milligrams

A unit of mass equal to one thousandth of a gram, used in measurements of small quantities of substances.

Grams

A unit of mass equal to one thousandth of a kilogram in the metric system, commonly used for measuring small quantities of material.