Q423
Bond yield is 12% and bond risk premium is 4.5% then cost of common stock would be
A.
37.50%
B.
7.50%
C.
16.50%
AnswerD.
2.67%
Answer: Option C
Solution
Answer: Option C
Solution:
Common Stock = Bond yeild + Bond risk premium
12% + 4.5% = 16.50%.