If a Firm Is Experiencing No Capital Rationing, It Should

question 93

Multiple Choice

If a firm is experiencing no capital rationing, it should accept all investment proposals

• A) as long as it has available funds.
• B) that return an amount equal to or greater than the cost of capital.
• C) that return an amount greater than the cost of equity.
• D) that are available, regardless of return.

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Definitions:

Symmetry

The quality of being made up of exactly similar parts facing each other or around an axis; often associated with harmony and balance in design or form.

Mere Exposure Effect

Repeated exposure to an object results in greater attraction to that object.

Attractive

Qualities or features that make someone or something appealing or desirable.

Reinforcement Model

A theory suggesting that behaviors are learned and repeated based on the rewards or punishments that follow them.