Answer:
A company's overall cost of equity is directly related to the risk level of the firm.
Explanation:
A company's cost of equity is the compensation that financial markets require to own assets and also to take on the risk that comes with ownership. It is estimated using capital assets pricing model. It is the return firms pay to equity investors as compensation for the risk they took to invest capital. A company's overall cost of equity is directly related to the risk level of the firm.
