Cost of common stock is 16% and bond yield is 9% then bond risk premium would be

Option B is incorrect because it is the yield on the risk-free bond. Option C is incorrect because it is the difference between the yield on the risky bond and the risk-free bond divided by the yield on the risky bond. Option D is incorrect because it is the yield on the risky bond multiplied by 100.

The bond risk premium is important because it helps investors to determine the expected return on a risky bond. The higher the bond risk premium, the higher the expected return on the bond. This is because investors demand a higher return for taking on more risk.