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Business Studies · 2025 · 1 mark
CBSE 2025 · Region 7 · Set 1 · Q4
Read the following statements: Assertion (A) and Reason (R).
Assertion (A): The cost of debt is lower than the cost of equity for
a firm.
Reason (R): Lender's risk is lower than the shareholder's risk.
Additionally, interest paid on debt is a deductible
expense for computation of tax liability, whereas
dividends are paid out of after tax profit.
Choose the correct alternative from the options given below:
Official answer
From CBSE’s own marking scheme for this paper.
(A)
Both Assertion (A) and Reason (R) are true and Reason (R) is the correct explanation of Assertion (A).
Marking-scheme solution
(A)
Both Assertion (A) and Reason (R) are true and Reason (R)
is the correct explanation of Assertion (A).
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CBSE Class 12 Business Studies past-paper question from the 2025board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.