The Constant Growth Model May Be Used to Estimate the Risk

question 83

True/False

The constant growth model may be used to estimate the risk premium component of the cost of equity as an alternative to relying on historical information as is done in the capital asset pricing model.

Identify guidelines for choosing between FIFO and average cost methods for inventory valuation.

Comprehend the principles and implications of the specific identification method of inventory costing.

Understand the effects of price changes on inventory valuations and company profit margins.

Determine the relationship between inventory valuation methods and tax implications.