You Need to Use the Pure Play Approach to Assign

question 48

Multiple Choice

You need to use the pure play approach to assign a cost of capital to a proposed investment.Which one of the following characteristics should you most concentrate on as you search for an appropriate pure play firm?

• A)Firm size
• B)Firm location
• C)Firm experience
• D)Firm operations
• E)Firm management

Understanding the concept of recency syndrome and its effects on memory and decision-making.

Analyzing the impact of stereotyping on rational decision-making processes.

Identifying strategies to mitigate personal perspective in decision-making.

Recognizing and avoiding decision-making traps, such as promising too much or responding inappropriately to failure.

---

Definitions:

Dividends Account

An account used in bookkeeping that records the dividends paid out to shareholders from a corporation's earnings.

Common Stock

A type of equity security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Transfer of Assets

The act of moving ownership of assets from one party to another, which could involve selling, gifting, or exchanging.

Ledger

A book or collection of financial accounts where all transaction records for a business are maintained.