Which Appraisal Method Helps Guard Against Recency Error

question 84

Multiple Choice

Which appraisal method helps guard against recency error?

• A) critical incident method
• B) forced-choice method
• C) graphic rating scales
• D) mixed-standard scale

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Definitions:

Cost of Capital

The rate of return that a company must earn on its projects to maintain its market value and attract investment.

M&M Proposition I

A theory in corporate finance that states the value of a firm is unaffected by how it is financed, in the absence of taxes, bankruptcy costs, and asymmetric information.

M&M Proposition II

A theory in corporate finance stating that a firm's cost of equity increases with its level of debt, considering there are no taxes, transaction costs, or bankruptcy costs.