Question

While determining the normal rate of return for the variation of shares in Market Value Method, which of the following should be taken into consideration?

• A. The degree of risk involved
• B. The current rate of interest on gilt-edged securities
• C. Weighted average cost of capital
• D. All of the above

Answer 1

The correct option is D All of the above

While determining the normal rate of return for the variation of shares in market value method the factors that are considered are the degree of risk involved, the current rate of interest on gilt-edged securities and weighted average cost of capital.