Question
The Peer-based Approach is used to estimate the equity beta of a firm based on its peer companies. Which statement about the Peer-based Approach is
The Peer-based Approach is used to estimate the equity beta of a firm based on its peer companies. Which statement about the Peer-based Approach is most likely true? Question 5 options: The Peer-based Approach returns a more precise estimate of the focal firm's equity beta if the focal firm's monthly stock market return over the last 60 months was noisy. The Peer-based Approach can be used to estimate the equity beta of a private firm based on its private peer companies. The Peer-based Approach can be used to estimate the equity beta of a public company based on its private peer companies. The Peer-based Approach returns a less precise estimate of the focal firm's equity beta than the Direct Approach if the focal firm's monthly stock market return over the last 60 months was noisy
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