Which of the Following Does NOT Always Increase a Company's

question 24

Multiple Choice

Which of the following does NOT always increase a company's market value?

• A)Increasing the expected growth rate of sales.
• B)Increasing the expected operating profitability (NOPAT/Sales).
• C)Decreasing the capital requirements (Capital/Sales).
• D)Decreasing the weighted average cost of capital.
• E)Increasing the expected rate of return on invested capital.

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Definitions:

Classified Balance Sheet

A financial statement that groups a company’s assets, liabilities, and equity into categories, making it easier to understand a company’s financial position.

Inventory

A company's merchandise, raw materials, and finished and unfinished products which have not yet been sold.

Current Asset

Assets that are expected to be converted into cash, sold, or consumed in the business within a year or within the operating cycle.

Operating Expenses

Expenses incurred through normal business operations, such as salaries, rent, utilities, and office supplies, which are not directly tied to the production of goods or services.