medium · Principles of Finance
A corporation's long-term bonds are currently trading at a yield to maturity (YTM) of 6.2%.
If an analyst applies the bond-yield-plus-risk-premium method with a mid-range risk premium of 4.0%, what is the estimated cost of equity?
- 8.65%
- 2.20%
- 10.20%
- 12.40%
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