Which of the Following Statements Is Correct

Multiple Choice

Which of the following statements is correct?

A) Under normal conditions, the CAPM approach to estimating a firm's cost of retained earnings gives a better estimate than the DCF approach.
B) The CAPM approach is typically used to estimate a firm's flotation cost adjustment factor, and this factor is added to the DCF cost estimate.
C) The risk premium used in the bond-yield-plus-risk-premium method is the same as the one used in the CAPM method.
D) In practice (as opposed to theory) , the DCF method and the CAPM method usually produce exactly the same estimate for r.
E) The above statements are all false.