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Degrees-of-freedom problem and implied cost of equity capital

✍ Scribed by Lawrence Kryzanowski; Abdul H. Rahman


Book ID
116494835
Publisher
Elsevier Science
Year
2009
Tongue
English
Weight
183 KB
Volume
6
Category
Article
ISSN
1544-6123

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## Abstract The estimation of the cost of equity capital (COE) is one of the most important tasks in financial management. Existing approaches compute the COE using historical data, i.e. they are backward‐looking methods. This study derives a method to calculate forward‐looking estimates of the COE