The bond yield plus risk premium approach is a method of finding out the cost of

Related MCQs

• When the required rate of return is less than the coupon rate the premium on the bond-
• Dividend yield method the cost of equality is ascertained as a percentage of
• In the case of existing shares cost of equity is computed under dividend yield method by dividing dividend per share with
• .Earnings yield method is applied when the dividend pay out ratio is
• To judge the comparative risk of projects having same cost and different NPV which method is used
• To judge the comparative risk of projects having same cost and same NPV which method is used
• Which of the following recognizes risk in capital budgeting analysis by adjusting estimated cash flows and employs risk free rate to discount the adjusted cash flows?
• Higher the risk involved in a firm, ------- is the cost of capital
• A project costs Rs50,000 and will yield annual cash inflows of Rs20,000 for 5years. Calculate its payback period.
• A project requires an investment of Rs500000and has scrape value of Rs.20000 after five years. It is expected to yield profits after depreciation and taxes during the five years amounting to Rs.40000,Rs60000, Rs.50000,Rs70000 and Rs20000.What is the average rate of return on the investment?