1. Which one of the following statements is correct concerning dollar cost averaging? plans?
A. Dollar cost averaging is a short−term trading strategy.
B. The goal of dollar cost averaging is long−term capital appreciation.
C. The goal of dollar cost averaging is current dividend income.
D. Dollar cost averaging is an active trading strategy.
2. Under normal circumstances, the weighted average cost of capital is used as the firm's required rate of return because:
A. as long as the firm's investments earn returns greater than the cost of capital, the value of the firm will not decrease.
B. returns below the cost of capital will cover all the fixed costs associated with the capital and provide excess returns to the firm's stockholders.
C. It is comparable to the average of all the interest rates on debt that currently prevail in the financial markets.
D. it is an indication of the return the firm is expecting to earn in future from all of its expansion plans.