What Are the Drawbacks of Using Total Return to Shareholders

question 85

Essay

What are the drawbacks of using total return to shareholders and firm market capitalization to measure firm performance?

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Definitions:

Profitably Extractable

Refers to natural resources that can be mined or harvested at a profit, considering the current market prices and extraction costs.

Compacted Plant Remains

Organic matter that has been compressed over time into solid formations, often contributing to the formation of coal and other fossil fuels.

Limestone

A sedimentary rock composed mainly of calcium carbonate, commonly used in construction and as a raw material in manufacturing.

Marble

A metamorphic rock formed from limestone, known for its use in sculpture and architecture due to its beauty and durability.