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:

Body Dysmorphic Disorder

A mental health disorder characterized by obsessive focus on perceived flaws in appearance, often leading to significant distress and impairment.

Orthopedists

Medical doctors specializing in diagnosing, treating, and managing disorders and injuries of the musculoskeletal system.

Social Settings

Environments where people gather and interact, such as schools, workplaces, or social events.

Anxiolytic

A drug or substance that helps to reduce anxiety.