Assertion A Arbitrage keeps the cost of capital constant despite change in the capital structure nbs...........

Miscellaneous Others

Assertion (A) : Arbitrage keeps the cost of capital constant despite change in the capital structure. (2 marks)

Reason (R) : It ensures compensating inverse change in cost of equity capital with a

change in the cost of debt capital.

Codes :

Assertion (A) and Reason (R) both are correct and (R) is correct explanation of (A).

Assertion (A) and Reason (R) are correct, but (R) is not correct explanation of (A).

Assertion (A) is correct, but Reason (R) is incorrect.

Assertion (A) is not correct, but Reason (R) is correct.

Assertion (A) and Reason (R) are correct, but (R) is not correct explanation of (A).

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