According to the Bond-Yield-Plus-Risk-Premium Approach, a Firm's Cost of Retained

Multiple Choice

According to the bond-yield-plus-risk-premium approach, a firm's cost of retained earnings, r_s, can be estimated by adding a risk premium of 3 to 5 percentage points to:

A) its cost of preferred stock, r_ps.
B) the risk free rate of return.
C) its before-tax interest cost of debt, r_s.
D) its return on equity (ROE) .
E) its after-tax interest cost of debt, r_sT.