What is the possible cost of capital rationing?
A) The firm may have excess fixed assets.
B) The firm is likely to take too many risky projects.
C) The firm may miss out on positive NPV opportunities
D) The firm may have too high a cost of capital.

Question

Quizplus · Accepted Answer

Capital rationing can lead to the firm not being able to invest in positive NPV projects, which can result in missed opportunities for growth and profitability. This can have a significant long-term impact on the firm's financial performance.

What Is the Possible Cost of Capital Rationing