text identifies three methods for estimating the cost of common stock from retained earnings: the CAPM method, the DCF method, and the bond-yield-plus-risk-premium method.However, only the CAPM method always provides an accurate and reliable estimate.

Question

Quizplus · Accepted Answer

While the CAPM method is commonly used for estimating the cost of common stock, it may not always provide an accurate and reliable estimate. The other methods mentioned (DCF and bond-yield-plus-risk-premium) may also be useful in certain situations and contexts. Ultimately, the accuracy and reliability of any method will depend on a variety of factors, including the quality of the data and assumptions used in the analysis.

Text Identifies Three Methods for Estimating the Cost of Common