the taylor comoany is closely held and therefore cannot generate reliable inputs with which to use the capm method for estimating a companys cost of internal equity. taylors bonds yield 11.52% and the firms analysts estimate that the firms risk premium on its stock over its bonds is 3.55%. based on the bond yield plus risk premium approach taylors cost of internal equity is:

16.58%

15.07%

18.84%

14.32%