Question
In computing the cost of equity for a firm, which of the following are recommended steps in estimating the CAPM beta using regression analysis? I.
In computing the cost of equity for a firm, which of the following are recommended steps in estimating the CAPM beta using regression analysis?
I. Use a sample size equal to or greater than 60.
II. Use daily returns.
III. Use a diversified value-weighted index.
IV. Watch for possible distortions from market bubles.
IV.
| I, III, and IV only. | ||
| II and IV only. | ||
| I, II, and III only | ||
| II, III, and IV only. |
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Intermediate Accounting
Authors: J. David Spiceland, James Sepe, Mark Nelson, Wayne Thomas
9th Edition
9781259722660
