The determination of any explicit cost of capital requires two things: (i) the net proceeds the firm will receive from the particular capital source and (ii) the expected future payments the firm will...

The determination of any explicit cost of capital requires two things: (i) the net proceeds the firm will receive from the particular capital source and (ii) the expected future payments the firm will make to the investors In spite of the similarity of estimation problems, it is recognised that the cost of equity (both internal and external) is the most difficult cost to estimate. Briefly explain why this is so.