Economics · Financial Management
Which of the following statements are correct for computing the Cost of Equity? A. If dividend is expected to be constant, then dividend price approach should be used. B. If earnings per share is expected to be constant, then earnings price approach should be used. C. If earnings and dividend are expected to grow at a constant rate, then realized yield should be used. D. If it is difficult to forecast future, then Growth approach (Gordon's model) should be used which looks into the past. E. When the cost of equity or expectation of the investor is dependent on risk, then Capital Asset Pricing Model (CAPM) should be used. Choose the correct answer from the options given below:
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1A, B and E only✓
- 2B, C and D only
- 3A, B and D only
- 4A, B and C only
Correct answer
A, B and E only
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