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    Risk-adjusted discount rates

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    In adjusting for risk, which of the following is - "TRUE" - about the risk adjusted discount rate and/or the certainly equivalent methods _____________

    (a) The risk-adjusted discount rate allows for the use of varied costs of capital, enabling the large multi-divisional firm to incorporate differing levels of divisional risk into the capital budgeting process, (b) The risk-adjusted discount rate allows for the separate adjustment for risk and time, (c) The certainly equivalent method allows for the use of varied costs of capital, enabling the large multi-divisional firm to incorporate differing levels of divisional risk into the capital budgeting process, or (d) The certainly equivalent method allows for the separate adjustment for risk and time,

    Please advise answer & why - thanks so much!

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    https://brainmass.com/business/accounting/risk-adjusted-discount-rates-35155

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    (b) The risk-adjusted discount rate allows for the separate ...

    Solution Summary

    The risk-adjusted discount rates are determined for equivalent methods. You will find the answer to this puzzling question inside.

    $2.19

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