Question: the harrison company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of

the harrison company is closely held and, therefore, cannot generate reliable inputs with which to use the CAPM method for estimating a company's cost of internal equity. Harrisons bonds yield 10.28%, and the firms analysts estimate that the firsm risk premium on its stock over its bonds is 3.55%. Based on the bond-yield-plus-risk-premium approach, Harrisons cost of internal equity is: (option answers: 13.83%, 15.21%, 13.14%, 17.29%)

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