The weights used to determine the relative importance of the firm's sources of capital should reflect

Question

Quizplus · Accepted Answer

The relative importance of the firm's sources of capital should reflect their current market values, as this is the most accurate measure of their worth in the current market. Book values may not reflect the true value of the firm's assets and liabilities, and subjective adjustments for firm risk may not be objective or consistent. Current market values provide a reliable and objective basis for weighing the firm's sources of capital.

The Weights Used to Determine the Relative Importance of the Firm's