The ways to estimate the unlevered cost of capital of the firm using the data from the comparable publicly traded firms. Introduction: The risk associated with the firm and the cost of capital has to be estimated to value the investments of the firm. The one of the most important method to value the cost of capital is capital asset pricing model (CAPM).

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Chapter 19.4, Problem 2CC

Summary Introduction

To discuss: The ways to estimate the unlevered cost of capital of the firm using the data from the comparable publicly traded firms.

Introduction:

The risk associated with the firm and the cost of capital has to be estimated to value the investments of the firm. The one of the most important method to value the cost of capital is capital asset pricing model (CAPM).

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