It is probably easier to estimate the cost of equity than it is to estimate the cost of debt.

Question

Quizplus · Accepted Answer

The cost of debt is generally easier to estimate because it is based on observable interest rates and terms provided by lenders, whereas the cost of equity involves estimating future dividends, growth rates, and involves more assumptions and models (like the Capital Asset Pricing Model), making it more complex and subjective.

It Is Probably Easier to Estimate the Cost of Equity