Q437
Cost of common stock is 15% and bond yield is 10.5% then bond risk premium will be
A.
1.43%
B.
8.50%
C.
25.50%
D.
4.50%
AnswerAnswer: Option D
Solution
Answer: Option D
Solution:
Bond risk premium = Cost of common stock - Bond yeild = 15% - 10.5% = 4.5%.