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manikandan

· started a discussion

· 1 Months ago

sir plsss explain the context

Question:
A quick approximation of the typical firm's cost of equity may be calculated by
Options:
A) adding a 5 percent risk premium to the firm's before-tax cost of debt. 
B) adding a 5 percent risk premium to the firm's after-tax cost of debt. 
C) subtracting a 5 percent risk discount from the firm's before-tax cost of debt
D) subtracting a 5 percent risk discount from the firm's after-tax cost of debt.
E)

None of these

Solution:

Ans (a)

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