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Tangerine Tangerine ink Target capital structure is 20% debtthe following information about sleep please Corporation a company has no preferred stock ​
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Tangerine Tangerine ink Target capital structure is 20% debtthe following information about sleep please Corporation a company has no preferred stock ​

User IdoFlatow
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1 Answer

7 votes

16% is the answer.

Step-by-step explanation:

The following is used in order to calculate the cost of the retained earnings.

The Calculation of cost of retained earnings by using bond yield plus the risk premium method

= Long term bond yield + the risk premium

The Long term bond yield = 12 percent

The risk premium = 4 percent

Cost of retained earnings = 12 percent plus 4 percent = 16 %

Therefore, the correct option will be with the 16 percent .

User Alaa Sadik
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3.7k points
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