Capital Asset Pricing Model — the cost of equity for use in WACC: r_e = r_f + β_L · (r_m - r_f) + SP, where r_f is the 10- or 20-year U.S. Treasury yield, (r_m - r_f) is the equity risk premium (historically sim 5-8% per Kroll), β_L is the target's relevered beta, and SP is an optional size premium (typically 0% for large/mid-cap; 1-3%+ for small-cap below $2-3B market cap).