In Decision Tree Analysis with EMV, the Sum of the ________

question 3

Multiple Choice

In decision tree analysis with EMV, the sum of the ________ must equal 100 percent.

• A) weights
• B) probabilities
• C) consequences
• D) costs

---

Definitions:

Market Capitalization Rate

The expected rate of return on a portfolio consisting of all publicly traded securities, weighted by market capitalization.

PVGO

Present Value of Growth Opportunities; the portion of a company's stock price that is attributed to its expected earnings growth.

Free Cash Flow

The amount of cash generated by a company after accounting for capital expenditures, necessary to maintain or expand the asset base.

WACC

The weighted average cost of capital, a measure of a firm's cost of capital in which each category of capital is proportionately weighted.