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Basic Question 1 of 4

The typical build-up model for estimating the cost of common equity capital may consist of all of the following components EXCEPT:

I. A risk-free rate.
II. Beta.
III. A general equity risk premium.
IV. A size premium.

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I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz

Tamara Schultz

Learning Outcome Statements

calculate the value of a private company based on market approach methods and describe advantages and disadvantages of each method;

CFA® 2026 Level II Curriculum, Volume 4, Module 25.