Which of the following statements about cost-of-equity, Ask an Expert

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Which of the following statements about cost-of-equity estimation is most correct?

The CAPM approach is always superior to the DCF approach.

The risk premium used in the debt-cost-plus-risk-premium approach is the same as the risk premium used in the CAPM approach.

Because the CAPM and DCF approaches use market data, they provide precise cost-of-equity estimates.

The debt-cost-plus-risk-premium approach can be used when the business does not have publicly traded equity.

All approaches always produce estimates that fall within a narrow range.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92403999

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