Which of the Following Is Correct Regarding the Most Appropriate

question 72

Multiple Choice

Which of the following is correct regarding the most appropriate discount rate to be used in valuing the targeted firm?

• A)The appropriate discount rate to be used when calculating the NPV of a target company is the cost of equity of the acquiring firm.
• B)The appropriate discount rate to be used when calculating the NPV of a target company is the cost of debt of the target company.
• C)The appropriate discount rate to be used when calculating the NPV of a target company is the cost of equity of the target company.
• D)The appropriate discount rate to be used when calculating the NPV of a target company is the cost of junk bond debt of the target company.

---

Definitions:

Calculated

Describes a value or result obtained through a mathematical process or computation.

Customer Number

is a unique identifier assigned to individuals or entities to track their transactions or interactions with a business.

Uppercase

Capital letters used in writing to denote importance, to start sentences, or for proper nouns.

Insertion Point

The cursor location in a document or text field showing where new text or objects will be inserted.