Examveda
Examveda

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%

Answer: Option D

Solution(By Examveda Team)

Bond risk premium = Cost of common stock - Bond yeild
= 15% - 10.5% = 4.5%.

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