Which of the Following Methods of Estimating the Cost of Common

question 80

Multiple Choice

Which of the following methods of estimating the cost of common equity for a firm treats risk explicitly?

• A) DCF method.
• B) CAPM method.
• C) Composite method.
• D) Bond-yield-plus-risk-premium method.
• E) Answers b and d are both correct.

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Definitions:

Effective Performance

The level of output or efficiency that an individual or organization achieves, meeting or exceeding predetermined standards or objectives.

Stress Level

The degree or intensity of stress an individual is experiencing, which can impact both physical and mental health.

Employee Performance

A measure of how well an employee fulfills their job duties and executes tasks.

Individual Differences

Pertains to the variations or distinctions in the characteristics, traits, or behavior patterns among individuals.