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The cost of common stock equity may be estimated by using the​ ________. A. DuPont analysis B. breakminuseven analysis C. capital asset pricing model D. yield curve
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The cost of common stock equity may be estimated by using the​ ________. A. DuPont analysis B. breakminuseven analysis C. capital asset pricing model D. yield curve

User Wagashi
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Answer: Option C

Explanation: Capital asset pricing model is a method of computing cost of equity an entity has to bear for financing its projects.

It can be shown as following :-

Ke = Rf + β * (ERm - Rf)

where,

Rf = risk free rat

β = beta of the investment

ERm = expected rate of return

Ke = cost of equity

Hence, the correct option is C

User Yu Gu
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