Considering the situation described in the question, accordingly, the firm’s estimated cost of equity "is dependent upon a reliable estimate of the market risk premium."
This is because the cost of capital of a business firm should accurately balance the cost of debt and the cost of equity.
Also, it should be noted that the average market risk premium in the United States will be around 5.5 percent in 2021.
Hence, in this case, it is concluded that the correct answer is that the firm’s estimated cost of equity "is dependent upon a reliable estimate of the market risk premium."
Learn more about the capital asset pricing model here: https://brainly.com/question/24158909
