The cost of equity capital for non-dividend paying stocks can be determined by ____. I. using the Capital Asset Pricing Model II. estimating ke for comparable dividend-paying stocks in their industry a. Only statement I is correct. b. Only statement II is correct. c. Both statements I and II are correct. d. Neither statement I nor II is correct.
The cost of equity capital for non-dividend paying stocks can be determined by ____. I. using the Capital Asset Pricing Model II. estimating ke for comparable dividend-paying stocks in their industry a. Only statement I is correct. b. Only statement II is correct. c. Both statements I and II are correct. d. Neither statement I nor II is correct.
Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN:9781285190907
Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Chapter13: Valuation: Earnings-based Approach
Section: Chapter Questions
Problem 1QE
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Question
which one is correct please confirm?
The cost of equity capital for non-dividend paying stocks can be determined by ____.
I. using the
II. estimating ke for comparable dividend-paying stocks in their industry
| a. |
Only statement I is correct.
|
|
| b. |
Only statement II is correct.
|
|
| c. |
Both statements I and II are correct.
|
|
| d. |
Neither statement I nor II is correct.
|
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