Country risk can best be accounted for in the cost of equity for an emerging market by:

Group of answer choices

Incorporating the effect of returns on sovereign bonds and global equity returns in the cost of equity.

Adjusting a U.S. beta upward for the industry in question to account for the greater volatility in emerging markets.

Adding the sovereign spread to the risk-free rate in the cost of debt.

Adding the sovereign spread to a CAPM-based cost of equity estimate.