This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Which of the following statements is correct? (Read 42 times)

Adc3669

  • Full Member
  • ***
  • Posts: 148
on: Aug 7, 2023
Which of the following statements is correct?

◦

An advantage shared by both the DCF and CAPM methods when they are used to estimate the cost of equity is that little or no judgment is required.


◦

If the calculated beta overestimates the firm’s true investment risk, i.e., if the historical beta exceeds the forward-looking beta that investors think exists, then the CAPM method based on the historical beta will produce an estimate of rsand thus a WACC that is too low.


◦

The specific risk premium used in the CAPM is the same as the risk premium used in the bond-yield-plus-risk-premium approach.


◦

Beta measures market risk, which is the most relevant risk measure for a publicly owned firm that seeks to maximize its intrinsic value. This is true even if not all of the firm’s shareholders are well diversified.

Financial Management: Theory and Practice ¦ Brigham, Ehrhardt, Gessaroli, Nason ¦ 4th Edition
Buy Test-Bank


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by Adc3669 on Aug 7, 2023

msgero

  • Full Member
  • ***
  • Posts: 155
Reply #1 on: Aug 7, 2023
Lorsum iprem. Lorsus sur ipci. Lorsem sur iprem. Lorsum sur ipdi, lorsem sur ipci. Lorsum sur iprium, valum sur ipci et, vala sur ipci. Lorsem sur ipci, lorsa sur iprem. Valus sur ipdi. Lorsus sur iprium nunc, valem sur iprium. Valem sur ipdi. Lorsa sur iprium. Lorsum sur iprium. Valem sur ipdi. Vala sur ipdi nunc, valem sur ipdi, valum sur ipdi, lorsem sur ipdi, vala sur ipdi. Valem sur iprem nunc, lorsa sur iprium. Valum sur ipdi et, lorsus sur ipci. Valem sur iprem. Valem sur ipci. Lorsa sur iprium. Lorsem sur ipci, valus sur iprem. Lorsem sur iprem nunc, valus sur iprium.
Answer Preview
Only 39% of students answer this correctly


Adc3669

  • Member
  • Posts: 148
Reply 2 on: Aug 7, 2023
Thanks for the timely response, appreciate it

yeungji

  • Member
  • Posts: 319
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

Astigmatism is the most common vision problem. It may accompany nearsightedness or farsightedness. It is usually caused by an irregularly shaped cornea, but sometimes it is the result of an irregularly shaped lens. Either type can be corrected by eyeglasses, contact lenses, or refractive surgery.

Did you know?

All adults should have their cholesterol levels checked once every 5 years. During 2009–2010, 69.4% of Americans age 20 and older reported having their cholesterol checked within the last five years.

Did you know?

According to the American College of Allergy, Asthma & Immunology, more than 50 million Americans have some kind of food allergy. Food allergies affect between 4 and 6% of children, and 4% of adults, according to the CDC. The most common food allergies include shellfish, peanuts, walnuts, fish, eggs, milk, and soy.

Did you know?

Inotropic therapy does not have a role in the treatment of most heart failure patients. These drugs can make patients feel and function better but usually do not lengthen the predicted length of their lives.

Did you know?

More than nineteen million Americans carry the factor V gene that causes blood clots, pulmonary embolism, and heart disease.

The surgical nurse assists the client into the correct position The surgical nurse assists the client into the correct position
Correct position when lifting a heavy object off the floor. Correct position when lifting a heavy object off the floor.
Examples of Mission Statements Examples of Mission Statements
Tardigrade wasn't correct, nor was Gastrotricha. What on earth is this asking me. Tardigrade wasn't correct, nor was Gastrotricha. What on earth is this asking me.
E9-23 Prepare income statements Explain the difference in operating income E9-23 Prepare income statements Explain the difference in operating income
A(n) _____ is a spur-of-the-moment question. Fill in the blank(s) with correct word A(n) _____ is a spur-of-the-moment question. Fill in the blank(s) with correct word
Video: Virtual Tour of the Heart

For a complete list of videos, visit our video library