Maximizing Enterprise Value and Maximizing Shareholder Value Are Closely Linked

question 55

Multiple Choice

Maximizing enterprise value and maximizing shareholder value are closely linked because:

• A)Enterprise value and shareholder value are the same thing
• B)Shareholder value is calculated by adding debt and other non-equity financial claims to the DCF value of the firm
• C)Shareholder value is calculated by subtracting debt and other non-equity financial claims from the enterprise value of the firm
• D)A business enterprise is owned by its shareholders.

---

Definitions:

Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) is a federal law designed to ensure accuracy, fairness, and privacy in the data used by consumer reporting agencies.

Auto & Life Insurance Company

An insurance company that provides both automobile insurance, protecting against vehicle-related damages, and life insurance, offering financial protection against death or disability.

Premium Rates

The cost of insurance coverage, typically charged monthly or annually, determined by risk factors and the amount of coverage.

Fair Debt Collection Practices Act

U.S. legislation aimed at promoting fair debt collection practices and protecting consumers against abusive, deceptive, and unfair collection practices.