Explain what is meant by a financing risk premium in the, Finance Basics

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Explain what is meant by a financing risk premium in the

Question: 1. What drives growth in residual operating income?

2. Explain what is meant by a financing risk premium in the equity cost of capital. When will a financing risk premium be negative?

3. A firm with positive net financial assets will typically have a required return for equity that is greater than the required return for its operations. Is this correct?

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