Country risk can reasonably be accounted for in the cost of capital for an emerging market by:

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

B)No adjustment is necessary - beta should already reflect country risk fully.

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

D)Incorporating the sovereign spread or returns on sovereign spreads in both the cost of debt and the cost of equity.