For estimating the cost of common equity, we discuss two. The first method uses the [...], and the second method uses the [...]
Answer
capital asset pricing model
dividend discount model (based on discounted cash flows)
If you want to change selection, open original toplevel document below and click on "Move attachment"
Parent (intermediate) annotation
Open it There are several methods available for estimating the cost of common equity, and we discuss two in this reading. The first method uses the capital asset pricing model, and the second method uses the dividend discount model, which is based on discounted cash flows. No matter the method, there is no need to make any adjustment in the cost of equity for
Original toplevel document
2.1. Taxes and the Cost of Capital l on the borrowing. Equity entails no such obligation. Estimating the cost of conventional preferred equity is rather straightforward because the dividend is generally stated and fixed, but estimating the cost of common equity is challenging. <span>There are several methods available for estimating the cost of common equity, and we discuss two in this reading. The first method uses the capital asset pricing model, and the second method uses the dividend discount model, which is based on discounted cash flows. No matter the method, there is no need to make any adjustment in the cost of equity for taxes because the payments to owners, whether in the form of dividends or the return on capital, are not tax-deductible for the company.
<span><body><html>
Summary
status
not learned
measured difficulty
37% [default]
last interval [days]
repetition number in this series
0
memorised on
scheduled repetition
scheduled repetition interval
last repetition or drill
Details
No repetitions
Discussion
Do you want to join discussion? Click here to log in or create user.