The Market-To-Book Value Ratio and the Tobin's Q Ratio Are

question 20

Multiple Choice

The market-to-book value ratio and the Tobin's Q ratio are both indicators of a successful firm when:

• A) their values are both greater than 0.
• B) their values are both no less than 10.
• C) their values are both less than 0.
• D) their values are both less than 1.
• E) their values are both greater than 1.

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Definitions:

Foreign Exchange Gain

A gain resulting from changes in exchange rates between currencies, affecting the value of foreign currency-denominated assets or liabilities.

Consolidated Income Statement

A consolidated income statement presents the financial performance of a parent company and its subsidiaries as one combined entity.

Forward Exchange Contract

A financial agreement between parties to exchange currencies at a predetermined future date and rate.

Annual Interest Rate

The percentage of interest that will be earned or paid on investments or loans over a one-year period.