You are computing the value of a firm headquartered in an emerging market. Identify the factors unique

Question:

You are computing the value of a firm headquartered in an emerging market. Identify the factors unique to an emerging market that need to be evaluated when estimating the cost of equity using the Capital Asset Pricing Model (CAPM).

Capital Asset Pricing Model
The Capital Asset Pricing Model (CAPM) describes the relationship between systematic risk and expected return for assets, particularly stocks. The CAPM is a model for pricing an individual security or portfolio. For individual securities, we make use of the security market line (SML) and its... Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...