Why Sit on All that Cash? Firms Uncertain on Cost of Capital
Harvard Business Review
MARCH 10, 2011
Download this pdf for an executive summary, or login here for the full report.) In estimating the cost of equity, nearly nine out of ten organizations use the capital asset pricing model (CAPM), which calculates the cost of equity using a risk-free rate, beta factor, and a market risk premium, each of which introduces significant variability.
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