While calculating the weighted average cost of capital, market value weights are preferred because ____________.

Question

TuteeHUB · Accepted Answer

his is in conformity with the definition of cost of capital as the investors minimum required rate of return

TuteeHUB · Answer

ook value weights are historical in nature

TuteeHUB · Answer

ook value weights fluctuate violently

TuteeHUB · Answer

arket value weights are fairly consistent over a period of time.

1.	While calculating the weighted average cost of capital, market value weights are preferred because ____________.
A.	ook value weights are historical in nature
B.	his is in conformity with the definition of cost of capital as the investors minimum required rate of return
C.	ook value weights fluctuate violently
D.	arket value weights are fairly consistent over a period of time.
Answer» B. his is in conformity with the definition of cost of capital as the investors minimum required rate of return

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