Estimating the Cost of Common Equity Using the Discounted Cash

question 61

Multiple Choice

Estimating the cost of common equity using the discounted cash flow approach may be difficult to evaluate because

• A)the dividend yield is extremely difficult to estimate.
• B)the proper growth rate is difficult to establish.
• C)the current price of the common equity is always changing making it difficult to determine.
• D)all of the above are difficult to estimate.

---

Definitions:

Equal Employment Opportunity

A principle that ensures all individuals have a fair chance for employment, without discrimination on the basis of race, gender, age, or other protected characteristics.

Laws Governing

The legal rules and regulations that dictate the operations of entities, including labor laws that affect employment practices and workplace conditions.

FLSA Requirements

Stands for Fair Labor Standards Act requirements, which set standards for minimum wage, overtime pay, recordkeeping, and youth employment in the United States.

Overtime Pay

Compensation received for working beyond the standard hours set by a company or regulatory authority.