Which of the following statements/questions best illustrates communicating with candor? a. “You drive me crazy by leaving stacks of paper all over the place.”
✔ b. “I’m finding it hard to get our work done with all of these stacks of paper on the table.”
c. “Why don’t you clean up this mess you made?”
d. “Are you this messy at home?”
e. All of these illustrate communicating with candor.

Question:

Q1 If a company has a cost of capital of 12%, their minimum rate of return (hurdle rate) is expected to be?

a. 11%

b. 11.9%

c. 12%

d. Greater than 12%

Option C is correct

Minimum rate of return= 12%

Explanation:

The cost of capital is the minimum rate of rate of return that investors are expected to receive for their investment for it to be acceptable.

It is the opportunity cost of capital which the investors which investors would have earned on alternative investment opportunities.

The minimum rate of return encompasses the following factors; inflation, risk involved in the investment, prevailing interest rate

The minimum rate of return should be equal to or greater that the cost. Therefore the minimum rate of return = 12%

Minimum rate of return= 12%