question archive Question 40 Risk as pertains to the component costs of capital generally means: A
Question 40 Risk as pertains to the component costs of capital generally means: A
Subject:FinancePrice:2.88 Bought30
| Question 40 | ||||||
| Risk as pertains to the component costs of capital generally means: | ||||||
| A. potential loss | ||||||
| B. Uncertainty of cash flows | ||||||
| C. Probability of expected profits | ||||||
| D. Potential expected loss | ||||||
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Risk as pertains to the component cost of capital will reflect to the uncertainty of the cash flows which are associated with business because cash flows can never be predicted completely in advance so there will be risk associated with it, and they need to be adjusted with the different discounting rates.
All the other options are false.
Correct answer will be option (B) Uncertainty of cash flows.
