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.

A. Both (A) and (R) are false

B. Both (A) and (R) are true

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

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

Answer: Option B