The cost of equity capital is:
A) the expected return on the firm's stock that investors require.
B) frequently estimated by using the Capital Asset Pricing Model (CAPM).
C) generally considered to be a linear function of the systematic risk inherent in the security.
D) All of these.

Question

Quizplus · Accepted Answer

The cost of equity capital refers to the return that investors expect from the stock of the company. It is often estimated using the Capital Asset Pricing Model (CAPM) and is considered to be a linear function of the security's systematic risk. Therefore, all the given options are correct.

The Cost of Equity Capital Is