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The cost of equity can be determined using CAPM. Which of the following is incorrect?

The cost of equity can be determined using CAPM. Which of the following is incorrect?

A.The market risk premium is the risk of investing in equities.

B.The risk free rate is typically based on a 3-day treasury bill.

C.The higher the beta, the higher the cost of equity.

D.Using CAPM, the cost of equity is equal to the risk free rate + (B X Market Risk Premium).

Top Answer

This is incorrect: B.The risk... View the full answer

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Answer D.Using CAPM, the cost of... View the full answer

Option B :- The risk free... View the full answer

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