SML cost of equity estimation what are the advantages of using the SML approach to finding the

Question:

SML cost of equity estimation what are the advantages of using the SML approach to finding the cost of equity capital? What are the disadvantages? What specific pieces of information are needed to use this method? Are all of these variables observables or do they need to be estimated? What are some of the ways in which you could get these estimates?

Cost Of Equity
The cost of equity is the return a company requires to decide if an investment meets capital return requirements. Firms often use it as a capital budgeting threshold for the required rate of return. A firm's cost of equity represents the...