The ________ Is the Compound Annual Rate of Return That

question 32

Multiple Choice

The ________ is the compound annual rate of return that a firm will earn if it invests in the project and receives the given cash inflows.

• A) risk-free rate
• B) internal rate of return
• C) opportunity cost
• D) cost of capital

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Definitions:

Par Value

The face value of a bond or stock, as determined at the time of issuance.

Reverse Stock Split

A reverse stock split is an action taken by a corporation to reduce the number of its current shares in the market, thereby increasing the share price.

Market Price

The current price at which an asset or service can be bought or sold in a competitive and open market.

Shares Outstanding

Represents the total number of a company's shares that are currently owned by shareholders, including share blocks held by institutional investors and restricted shares owned by the company’s officers and insiders.