The Cost of Equity Is Usually Estimated Either by the Dividend

question 58

True/False

The cost of equity is usually estimated either by the dividend model or the capital asset pricing model (CAPM).

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Definitions:

Financial Statement

Reports that provide information about a company's financial condition, performance, and cash flows, including balance sheets, income statements, and more.

Permanent/Temporary

Classification of accounts; permanent accounts are balance sheet accounts that carry their ending balances into the next accounting period, while temporary accounts are closed and zeroed out at the end of each period.

Normal Balance

The side (debit or credit) on which increases are recorded in an account, based on the type of account.

Financial Statement

Reports that present the financial performance, position, and cash flows of a business for a specified period.