If bankruptcy costs and/or shareholder underdiversificationare an issue, what me
ID: 2661845 • Letter: I
Question
If bankruptcy costs and/or shareholder underdiversificationare an issue, what measure of risk is relevant when evaluatingproject risk in capital budgeting?a. Total project risk b. Contribution-to-firm risk c. Systematic risk d. Capital rationing risk If bankruptcy costs and/or shareholder underdiversificationare an issue, what measure of risk is relevant when evaluatingproject risk in capital budgeting?
a. Total project risk b. Contribution-to-firm risk c. Systematic risk d. Capital rationing risk
Explanation / Answer
Answer: a. Total project risk
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