If ROC Is Less Than a Firm's Cost of Capital

question 87

Multiple Choice

If ROC is less than a firm's cost of capital, which of the following must be true?

• A)the firm's EVA is positive.
• B)the firm's EVA is negative.
• C)the firm's ROE is equal to zero.
• D)the firm's ROE is negative.

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Definitions:

Orexin

Orexin is a neuropeptide that regulates arousal, wakefulness, and appetite, playing a crucial role in sleep-wake cycles and metabolic processes.

Appetite Hormones

Biological substances that influence appetite and food intake, such as ghrelin and leptin, playing crucial roles in hunger and satiety signals.

Hypothalamus

A small region of the brain located at the base, crucial for hormone production and regulation of essential bodily functions including temperature, thirst, and hunger.

Ghrelin

A hormone produced mainly by the stomach that stimulates appetite and promotes food intake.