When Estimating the Cost of Equity by Use of the Bond-Yield-Plus-Risk-Premium

question 61

True/False

When estimating the cost of equity by use of the bond-yield-plus-risk-premium method, we can generally get a good idea of the interest rate on new long-term debt, but we cannot be sure that the risk premium we add is appropriate.This problem leaves us unsure of the true value of r_s.

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Definitions:

Slave Traders

People or companies involved in the buying, transporting, and selling of individuals into slavery, often as part of the Transatlantic Slave Trade.

Slave Families

Family units among the enslaved population, forming bonds and kinships often in the face of oppression and the threat of separation due to sale or punishment.

Trains

Rail vehicles that move along tracks and are used for transporting people or goods over long and short distances.

Freedom

The condition or right of being able to act, speak, or think as one wants without hindrance or restraint, fundamental to democratic societies.