Market Value Ratios Provide Management with an Indication of How

question 79

True/False

Market value ratios provide management with an indication of how investors view the firm's past performance and especially its future prospects.These ratios include the Price/Earnings,the Market/Book,and Enterprise Value/EBITDA ratios.

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Definitions:

Real Option

A financial concept representing the choice a company has to undertake certain business decisions, like investment opportunities, waiting for more information before committing.

Option to Wait

The strategic choice to delay a decision or an investment to gather more information or wait for a more favorable market condition.

Option to Abandon

A business decision making tool that allows a company to cease an investment or project if it turns out to be financially nonviable, minimizing losses.

Direct Labor Costs

The total cost of all the labor that is directly involved in the production of goods or the performance of services.