In Calculating the Cost of Common Stock Equity, ________

Multiple Choice

In calculating the cost of common stock equity, ________.

A) the use of the capital asset pricing model (CAPM) is often preferred, because the data required are more readily available
B) the use of the CAPM is preferred, because it directly considers risk and the effect of inflation on the stock prices
C) the use of the constant-growth valuation model is often preferred, because the data required are more readily available
D) the use of the constant-growth valuation model is often preferred, because it has a stronger theoretical foundation