Traditional Accounting Does Not Focus on the Implicit Cost of Equity

question 70

True/False

Traditional accounting does not focus on the implicit cost of equity that is the required capital gains to complement dividends. However, evaluation methods exist to determine this value by financial managers.

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Definitions:

External Validity

The extent to which the results of a study can be generalized to other situations and to other people.

Quasi-Experiment

A research design that lacks the full control of true experimental designs but employs some method of making causal inferences from observed changes.

Correlational Study

A research method that examines the relationship between two variables to determine if a statistical relationship exists.

External Validity

The degree to which the findings of a research can be applied to different settings and different individuals.