All of the following methods may be used to determine the cost of equity capital (k_e) for a non-dividend-paying stock except

Question

Quizplus · Accepted Answer

The risk premium on debt approach, the Capital Asset Pricing Model approach, and comparing with similar dividend-paying stocks in the industry are commonly used methods to determine the cost of equity capital for a non-dividend-paying stock. However, simulation with growth expectations approach is not an accepted method for this purpose.

All of the Following Methods May Be Used to Determine