The required rate of return on the Cosmos Corporation's common stock is 10%, the current real rate of return in the market is 1%, and the inflation rate is 3%. In this case, the risk premium associated with Cosmos stock is
A) 5%.
B) 6%.
C) 7%.
D) 8%.

Question

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The Answer of The required rate of return on the Cosmos Corporation's common stock is 10%, the current real rate of return in the market is 1%, and the inflation rate is 3%. In this case, the risk premium associated with Cosmos stock is
A) 5%.
B) 6%.
C) 7%.
D) 8%.

The Required Rate of Return on the Cosmos Corporation's Common