Question

Which of the following statement(s) is correct about cost of equity?
A.      Where earnings, dividends, and equity share price all grow at the same rate, the cost of equity capital may be computed by the dividend growth method.
B.      When the risk-free rate is added to the market rate of the return, risk premium for the stock is arrived.

A Only A
B Only B
C Both A and B
D None of the above
E Incomplete information
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