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Bond risk premium is added in to bond yield to calculate...

This question belongs to Commerce Financial Management
Financial Management
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Bond risk premium is added in to bond yield to calculate the

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Correct Answer: Option C
Bond risk premium is added in to bond yield to calculate the cost of common stock. The cost of common stock is common stockholders' required rate of return. Companies can raise new common equity in two ways: by a new common stock issue or by retaining and reinvesting previous earnings.
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