The Opening Feature in Chapter 6 Focuses on Stroome, an Exciting

question 74

Multiple Choice

The opening feature in Chapter 6 focuses on Stroome, an exciting new Web-based service for editing and remixing video. The idea for Stroome emerged in:

• A) a graduate communications class at the University of Southern California
• B) a student-run incubator at the University of Illinois
• C) a technology commercialization class at Cornell
• D) a city-owned new business incubator in Cleveland
• E) a business plan class at Kansas State

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Definitions:

Required Rate of Return on Equity

The minimum rate of return that investors expect to receive on their equity investment in a company, taking into account the risk associated with the investment.

EBIT

Earnings Before Interest and Taxes, a measure of a firm’s profit that includes all expenses except interest and income tax expenses.

FCFF

Free Cash Flow to the Firm, a measure of a company's financial flexibility that represents the amount of cash generated by a company that is available for distribution among all its security holders.

Tax Bracket

Categories of income tax rates that increase progressively with the amount of taxable income.