Which Two of the Following Are Most Likely to Influence

question 47

Multiple Choice

Which two of the following are most likely to influence kE ?

• A) The proportion of profits retained
• B) Adopting a new strategy
• C) An increase in inflation
• D) Changing the payout ratio

---

Definitions:

Interest Rate

The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.

Dollar Amount

The value of something represented in terms of the currency of the United States, expressed as a quantity of dollars.

Discount Rates

The interest rate used in discounted cash flow analysis to determine the present value of future cash flows.

Present Value

Present Value is the current worth of a future sum of money or stream of cash flows given a specified rate of return, used in the assessment of investment attractiveness.