Confidence in the estimated cost of equity

Reference no: EM13128413

Surveys indicate that the CAPM is the most widely used method for estimating the cost of equity. However, other methods are also used because CAPM estimates may be subject to error, and people like to use different methods as checks on one another. If all of the methods produce similar results, then decision makers can have more confidence in the estimated cost of equity. Why do you think this is a correct statement?

Reference no: EM13128413

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