When a Manager Develops a Cost of Capital for a Specific

question 35

Multiple Choice

When a manager develops a cost of capital for a specific project based on the cost of capital for another firm which has a similar line of business as the project,the manager is utilizing the _____ approach.

• A)subjective risk
• B)pure play
• C)divisional cost of capital
• D)capital adjustment
• E)security market line

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Definitions:

Amafufunyana

A South African cultural belief describing a condition thought to be caused by witchcraft, characterized by aggressive behavior and believed to be possession by spirits.

Elder

Refers to an individual of a greater age, often known for wisdom and leadership within a community or family.

Collateral Sources

Alternative or secondary sources of information or finance that can be used when primary sources are unavailable.

Applied Psychology

The field of psychology concerned with applying psychological principles and research to solve practical problems in human behavior and experience.