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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