The Rate of Return Which a Firm Must Earn on Its

question 373

Multiple Choice

The rate of return which a firm must earn on its existing assets if the firm is to maintain the value of its stock is called the:

• A) Return on equity.
• B) Weighted average cost of capital.
• C) Adjusted market yield.
• D) Current yield.
• E) Capital yield.

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Definitions:

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a period, indicating the efficiency of inventory management.

Average Daily Cost

The average daily cost refers to the total cost per day, calculated by dividing the total expenses by the number of days in the period under consideration.

Days' Sales

A financial metric that estimates the average time it takes a company to convert its inventory into sales.

Cost Of Goods Sold

Direct expenses associated with creating the goods a company sells, including both materials and labor.