Q432
If future return on common stock is 19% and rate on T-bonds is 11% then current market risk premium will be
A.
Rs 30.00
B.
30.00%
C.
8.00%
AnswerD.
Rs 8.00
Answer: Option C
Solution
Answer: Option C
Solution:
Current market risk premium = Return on common stock - Rate on T-bonds = 19% - 11% = 8%.