Which of the Following Statements Is Most Correct

Multiple Choice

Which of the following statements is most correct?

A) The CAPM approach to estimating a firm's cost of common stock never gives a better estimate than the DCF approach.
B) The CAPM approach is typically used to estimate a firm's cost of preferred stock.
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 in theory) , the DCF method and the CAPM method usually produce exactly the same estimate for rs.
E) The statements above are all false.