Quiz Ch 10 – T/F Estimating Cost of Equity for Private Companies

Fundamentals of Financial Management, Concise

Brigham and Houston

09th Edition

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True or false: When a firm is privately held and its stock isn't publicly traded, measuring its beta for the CAPM model, observing its stock price for the DCF model, and determining the risk premium for the bond-yield-plus-risk-premium method become unfeasible. These factors collectively make estimating the cost of equity for a private company notably challenging.

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