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:

Zygote Fungi

Fungi that form a thick-walled zygospore during sexual reproduction.

Single Cells

Organisms or units of life that consist of only one cell, capable of performing all necessary life functions independently.

Yeast

A group of unicellular fungi that are important in the fermentation process and as model organisms in biological research.

Zygospores

Thick-walled resting spores formed by the fusion of cells from different mating types of certain fungi and algae, leading to genetic recombination and dormancy.