What Is Rollins' Cost of Common Stock Using the Bond-Yield-Plus-Risk-Premium

question 49

Multiple Choice

What is Rollins' cost of common stock using the bond-yield-plus-risk-premium approach?

• A) 13.6%
• B) 14.1%
• C) 16.0%
• D) 16.6%
• E) 16.9%

---

Definitions:

Implied Contract

An agreement derived from the actions or circumstances of the parties involved, rather than explicit words.

Objective Theory Of Contracts

A theory under which the intent to form a contract will be judged by outward, objective facts as interpreted by a reasonable person, rather than by the party’s own secret, subjective intentions. Objective facts might include what a party said when entering into the contract, how a party acted or appeared, and the circumstances surrounding the transaction.

Express Contract

A contract in which the terms of the agreement are fully and explicitly stated in words, oral or written.

Express Contract

A legally-binding agreement in which the terms are explicitly stated by the parties involved either orally or in writing.