While calculating the weighted average cost of capital, market value weights are preferred because ____________.
A. Book value weights are historical in nature
B. This is in conformity with the definition of cost of capital as the investors minimum required rate of return
C. Book value weights fluctuate violently
D. Market value weights are fairly consistent over a period of time.
Answer: Option A
Solution (By Examveda Team)
While calculating the weighted average cost of capital, market value weights are preferred because Book value weights are historical in nature.This Question Belongs to Commerce >> Financial Management
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