The Cost of Equity Capital Is

question 11

Multiple Choice

The cost of equity capital is:

• A) the expected return on the firm's stock that investors require.
• B) frequently estimated by using the Capital Asset Pricing Model (CAPM).
• C) generally considered to be a linear function of the systematic risk inherent in the security.
• D) All of these.

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Definitions:

Measuring

The process of quantitatively determining the size, length, quantity, or capacity of something using defined units.

Objects

Items, things, or entities that can be seen, touched, or otherwise sensed.

Size Constancy

The tendency to perceive objects as being the same size even though the sizes of their images on the retina may differ as a result of distance.

Infants

Young babies, typically under one year of age, who are in the earliest stage of human life, characterized by rapid physical and cognitive development.