Which one of the following is not used to estimate cost of equity capital ?
The External yield criterion is not a recognized method for estimating a company's cost of equity capital. The standard methods used to estimate the cost of equity (K_e) are…
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Which one of the following is not used to estimate cost of equity capital ?
Answer and explanation
Correct answer A
The External yield criterion is not a recognized method for estimating a company's cost of equity capital. The standard methods used to estimate the cost of equity (K_e) are the Dividend Valuation plus Growth model (D_1/P_0 + g), the Equity Capitalisation / Earnings-Price approach, and the Capital Asset Pricing Model (CAPM).
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UGC NET Commerce