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The following data relates to the ordinary shares of Bart Co.
The difference between the cost of equity using the dividend growth model and the cost of equity using the CAPM, is attributable to which one of the following causes? A. The CAPM calculates return as future share price changes as well as dividend, whereas the dividend growth model allows for expected future dividends only. B. The CAPM valuation of the cost of equity is based on a beta which is derived from share price observations over time, whilst the dividend valuation model is not. C. The CAPM allows for a premium for financial risk, which the dividend growth model does not. D. The CAPM allows for a premium for business risk, which the dividend growth model does not. |