Examveda
Examveda

Bond risk premium is 3% and bond yield is 10.2% then cost of common stock will be

A. 3.40%

B. 13.20%

C. 7.20%

D. 30.60%

Answer: Option B

Solution(By Examveda Team)

Common Stock = Bond yeild + Bond risk premium
10.2% + 3% = 13.20%.

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