Multiple Choice Questions on Assertion A Weighted average cost of capital should be used as a hurdle rate for accepting or reject........... for UGC NET ( Commerce) Preparation

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Multiple Choice Questions

Assertion A Weighted average cost of capital should be used as a hurdle rate for accepting or reject...........

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    Assertion (A) : Weighted average cost of capital should be used as a hurdle rate for accepting or rejecting a capital budgeting proposal.

    Reason (R) : It is because by financing in the proportions specified and accepting the project, yielding more than the weighted average required return, the firm is able to

    increase the market price of its stock.     (2 marks)

    Codes :

    Both (A) and (R) are false.

    Incorrect Answer

    Both (A) and (R) are true.

    Correct Answer

    (A) is true, while (R) is false.

    Incorrect Answer

    (A) is false, while (R) is true.

    Incorrect Answer
    Explanation:

    Both (A) and (R) are true.

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