Other Things Equal, If The

question 18

Multiple Choice

Other things equal, if the:

• A) required return increases, the P/E ratio will rise.
• B) risk premium increases, the P/E ratio will rise.
• C) risk-free rate rises, the P/E ratio will fall.
• D) dividend payout increases, the P/E ratio will fall.

Identify key dimensions of strategic farsightedness and recognize strategies that exhibit this quality.

Comprehend the roles of top management in strategy-making and the rational strategy-making mode.

Grasp the significance of scenario writing and forecasting in strategic planning.

Recognize the characteristics of a farsighted organization, including emphasis on long-term development and innovation.

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Definitions:

Accounting Profit

The financial gain calculated by subtracting total expenses from total revenues, according to standard accounting practices.

Own Capital

Resources or funds that an individual or company owns outright without any debt obligations.

Economic Profit

The deviation between complete financial gains and all-encompassing charges, covering both transparent and obscured costs.

Normal Rate

Often refers to a benchmark interest rate considered typical or average within an economic environment or financial product.