Which of the Following Is a Disadvantage of Measuring Firm

question 60

Multiple Choice

Which of the following is a disadvantage of measuring firm performance through total return to shareholders and firm market capitalization?

• A) Market volatility makes it difficult to assess firm performance through these measures, particularly in the short-term.
• B) These tools fail to indicate how the stock market views all available public information about a firm's expected future performance.
• C) These tools measure competitive advantage in absolute terms rather than relative terms.
• D) Only the book value of the share prices is taken into account when applying these measures, and not the market value.

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Definitions:

ATP

Adenosine triphosphate, the primary energy carrier in all living organisms, providing the energy needed for many cellular processes.

Polypeptide Chains

Long chains of amino acids linked by peptide bonds, which fold into specific three-dimensional shapes to form proteins.

Ribosome

A cellular organelle that functions as the site of protein synthesis, reading RNA sequences to assemble amino acids into proteins.

Golgi Body

Membrane-enclosed organelle that modifies proteins and lipids, then sorts the finished products into vesicles. Shaped like a stack of pancakes.