(Answered) 1 what is the bond-yield-plus-risk-premium estimate for

Accounting

1. What is the bond-yield-plus-risk-premium estimate for XYZ's cost of common equity?

"Bond yield + RP" premium 4%

market interest rate on XYZ's debt 10%

Bond-yield-plus-risk-premium estimate =

2. What is your final estimate for r_s?

METHOD ESTIMATE

CAPM 14.20%

DCF 13.80%

r_d + RP 14.00%

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