Which Factor in Valuing Your Company Is the Most Important

question 79

Multiple Choice

Which factor in valuing your company is the most important

• A) Future earnings capacity
• B) Book value
• C) Outlook of the economy
• D) Market price of similar companies' stocks

---

Definitions:

Profits

The financial gains obtained when revenues exceed the costs and expenses incurred to operate a business.

Fixed Cost

A cost that does not depend on the quantity of output produced; the cost of a fixed input.

Downward-Sloping Demand

A concept in economics that illustrates the inverse relationship between the price of a good and the quantity demanded by consumers.

Perfectly Competitive Firm

A company that operates in a market where there are many buyers and sellers, and where no single buyer or seller can influence the price of the product.