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:

Echoic Memory

A subtype of sensory memory that retains auditory information for a short period after the original sound is heard.

Fleeting Memory

A brief or rapidly fading memory, often unable to be recalled after a short period of time.

Paying Attention

The act of focusing cognitive resources on a particular stimulus or task, while filtering out distractions.

Professor's Lecture

An educational talk given by a professor to students, usually as part of a university or college course, intended to convey knowledge on a particular subject.