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Bond yield is 12 and bond risk premium is 4 5...

This question belongs to Commerce Financial Management
Financial Management
?

Bond yield is 12% and bond risk premium is 4.5% then cost of common stock would be

Answer & Solution
Correct Answer: Option C
Common Stock = Bond yeild + Bond risk premium 12% + 4.5% = 16.50%.
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1 Comment
DURGA PRASAD
DURGA PRASAD 9 years ago
The answer was wrong as the option provided also wrong. The ans must be 16.50% instead of 15.50%.
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