Which of the Following Is Considered a Firm's "Factor of Production

question 37

Multiple Choice

Which of the following is considered a firm's "factor of production"?

• A) money or cash balances of the firm
• B) the firm's shares of common stock
• C) U.S. Treasury bonds owned by the firm
• D) the office building occupied by the firm

Recognize financial crimes and embezzlement within corporations.

Know the rights of individuals upon arrest and during legal proceedings.

Understand the basic principles that determine the enforceability of contracts.

Recognize the role of written contracts and the exceptions to the rule that contracts must be in writing to be enforceable.

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Definitions:

Per Share FCFE

The amount of Free Cash Flow to Equity available per share of a company's stock, indicating the dividend-paying ability and financial health of the company.

Required Rate of Return

The smallest percentage of yearly earnings from an investment necessary to attract individuals or businesses to invest in a certain security or project.

FCFF Valuation Model

The FCFF Valuation Model estimates a company's value by using its Free Cash Flow to the Firm (FCFF), discounting the cash flows to their present value using the weighted average cost of capital.

WACC

Weighted Average Cost of Capital; the average rate of return a company is expected to pay its security holders to finance its assets, integrating debt and equity.