Which of the Following Statements Is Most Correct

question 27

Multiple Choice

Which of the following statements is most correct?

• A) Free cash flows are called "free" because the cost of capital for these cash flows is zero.
• B) Stock is valuable only because it generates cash flows for the investor.
• C) Managers can affect firm value by changing the riskiness of its cash flows.
• D) (a) and (b) are correct.
• E) (b) and (c) are correct.

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Definitions:

Intrinsic Motivation

Intrinsic motivation is the drive to engage in activities for their own sake, stemming from personal satisfaction, curiosity, or challenge, rather than external rewards.

Foster Parent

A foster parent is an individual or couple who provides a temporary home and care for children whose biological parents are unable to do so.

Material Rewards

Tangible, physical rewards given to individuals for achieving specific goals or desired behavior, often used as a motivational tool in various settings.

Yerkes-Dodson Law

A theory proposing that there is an optimal level of arousal for the best performance on a task: too little or too much arousal can decrease performance.