Which of the Following Statements Is Correct

question 6

Multiple Choice

Which of the following statements is correct?

• A) Under normal conditions,the CAPM approach to estimating a firm's cost of retained earnings gives a better estimate than the DCF approach.
• B) The CAPM approach is typically used to estimate a firm's flotation cost adjustment factor,and this factor is added to the DCF cost estimate.
• C) The risk premium used in the bond-yield-plus-risk-premium method is the same as the one used in the CAPM method.
• D) In practice (as opposed to in theory),the DCF method and the CAPM method usually produce exactly the same estimate for r_s.
• E) The above statements are all false.

---

Definitions:

Hearing Impairments

Hearing impairments refer to partial or total inability to hear, which can affect one's ability to communicate and interact with the environment.

Podcast

A digital audio file or series of files that can be downloaded to a personal device for listening.

Typography

The art and technique of arranging type, including the choice of font, size, length, and spacing, to make written language readable and appealing.

Readability

The ease with which a reader can understand or interpret a written text.