If a Firm Is Privately Owned,and Its Stock Is Not

question 18

True/False

If a firm is privately owned,and its stock is not traded in public markets,then we cannot measure its beta for use in the CAPM model,we cannot observe its stock price for use in the DCF model,and we don't know what the risk premium is for use in the bond-yield-plus-risk-premium method.All this makes it especially difficult to estimate the cost of equity for a private company.

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Definitions:

Online Role-play

A digital simulation of real-world scenarios that participants engage in to practice decision-making, problem-solving, or interpersonal skills in a controlled environment.

Computer Depiction

Describes the representation or illustration of objects, data, or processes via computer graphics and visualization techniques.

Simulation

The use of models or virtual environments to imitate real-life processes, situations, or environments for training, testing, or research purposes.

Avatars

Computer depictions of trainees, which the trainees manipulate in an online role-play.