Multiple Choice
In addition to calculating the required rate of return on a stock by the CAPM, analysts can use the risk premium approach where a risk premium is added onto the company's current bond yield. Typically this risk premium is equal to:
A) the current T-bill rate.
B) a range of values between 200-600 basis points.
C) equal to the market risk premium in the CAPM.
D) approximately 600 basis points.
Correct Answer:
Verified
Correct Answer:
Verified
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