Assertion (A) : According to the traditional view of capital structure a firm has an optimal capital structure that occurs when WACC is minimum.
Reason (R) : This approach clearly implies that WACC decreases only within the reasonable limit of financial leverage (D/E) and reaching to the minimum level, it starts increasing with financial leverage (D/E).
Select the correct code :
| A. | (A) and (R) both are correct. |
| B. | (A) is correct but (R) is incorrect. |
| C. | (R) is correct but (A) is incorrect. |
| D. | (A) and (R) both are incorrect. |
Answer : A Explanation : |
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Option: A Explanation : Explanation will come here. Explanation will come here. Explanation will come here. Explanation will come here. Explanation will come here. |
