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Which of the following statements about cost-of-equity estimation is most correct? The CAPM approach is always superior to the DCF approach. The risk premium used
Which of the following statements about cost-of-equity estimation is most correct?
The CAPM approach is always superior to the DCF approach.
The risk premium used in the debt-cost-plus-risk-premium approach is the same as the risk premium used in the CAPM approach.
Because the CAPM and DCF approaches use market data, they provide precise cost-of-equity estimates.
The debt-cost-plus-risk-premium approach can be used when the business does not have publicly traded equity.
All approaches always produce estimates that fall within a narrow range.
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