A firm's cost of equity can be estimated using the:
I.discounted cash-flow (DCF)approach;
II.capital asset pricing model (CAPM);
III.arbitrage pricing theory (APT)
A)I and II
B)I & III
C)II & III
D)I,II & III

Question

Quizplus · Accepted Answer

All three methods, DCF, CAPM, and APT, can be used to estimate a firm's cost of equity. DCF involves estimating future cash flows and discounting them to present value, CAPM uses the risk-free rate, beta, and market risk premium, and APT considers multiple factors affecting returns.

A Firm's Cost of Equity Can Be Estimated Using The