There Are Three Major Factors That Determine the Market Value

question 19

Multiple Choice

There are three major factors that determine the market value of a company's share of stock. All of the following are factors EXCEPT _____.

• A) amount of cash flows expected
• B) sales generated
• C) timing of cash flows
• D) risk taken to generate cash flows

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Definitions:

Dividend

A portion of a company's earnings which is paid to shareholders, usually on a quarterly basis.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in profits through dividends.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.

Issued

Refers to the number of shares that a corporation has legally sold to investors and are currently outstanding.