The Difficulty in Using the CAPM for Determining the Cost

question 78

Multiple Choice

The difficulty in using the CAPM for determining the cost of equity lies in:

• A) the estimation of the firm's beta.
• B) the estimation of the risk-free rate.
• C) the estimation of the return on the market.
• D) All of these choices are correct.

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Definitions:

Crutches

Mobility aids used to transfer weight from the legs to the upper body during walking or standing.

Swing-To Gait

A type of gait where an individual moves both crutches forward together and then swings both feet to the crutches.

Light-Headed

A feeling of dizziness or faintness, often due to a decrease in blood supply to the brain.

Ease Down

This term might refer to a process or action of reducing intensity or slowly diminishing an activity, but without a specific context, it's hard to define precisely.