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Which statement accurately describes the Bond Yield plus Risk Premium Approach? a. It estimates the cost of common equity, by adding a premium to the

Which statement accurately describes the Bond Yield plus Risk Premium Approach?

a.

It estimates the cost of common equity, by adding a premium to the firm's cost of debt.

b.

It estimates the yield on bonds by using the financial calculator.

c.

It estimates the yield on bonds using the Capital Asset Pricing Model (CAPM)

d.

It estimates the cost of common equity by adding the market risk premium to the cost of debt.

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