Although It Is a Subjective Measure, Analysts Often Estimate the Cost

Multiple Choice

Although it is a subjective measure, analysts often estimate the cost of common equity by adding a risk premium of 3 to 5 percentage points to the

A) the cost of preferred stock for the firm.
B) the risk free rate.
C) interest rate on the firm's long term debt.
D) the market return.
E) the growth rate of the firm.