A quick approximation of the typical firm's cost of equity may be calc – McqOptions

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1.	A quick approximation of the typical firm's cost of equity may be calculated by
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.
Answer» B. adding a 5 percent risk premium to the firm's after-tax cost of debt.

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