Facebook's Charging for User Actions That Generate More Sales for Advertisers

question 51

Multiple Choice

Facebook's charging for user actions that generate more sales for advertisers demonstrates

• A)the influence of social network users in the marketplace.
• B)the monopoly of Facebook over the marketplace.
• C)the increasing effectiveness of advertising on social networking sites.
• D)the convergence of social networking sites with each other.

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Definitions:

Price/Earnings Ratios

A valuation metric for evaluating the relative attractiveness of a company's stock, calculated by dividing the market price per share by its earnings per share.

Earnings Reinvestment

The practice of reinvesting a company's earnings back into its business to fund growth activities rather than distributing them as dividends to shareholders.

Growth Rate

The percentage increase in a company's revenue or profit over a specific period.

Cost of Equity Capital

The return a company requires to decide if an investment meets capital return requirements and is typically used in the capital asset pricing model.