Which of the Following Is a Capital Budgeting Method That

question 104

Multiple Choice

Which of the following is a capital budgeting method that ignores the time value of money?

• A) payback
• B) internal rate of return
• C) return on assets
• D) net present value

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Definitions:

Stock Dividends

The payment of additional shares of a company to its existing shareholders instead of cash.

Stock Splits

A corporate action in which a company divides its existing stock into multiple shares to increase the liquidity of the shares, though the market capitalization remains the same.

Shareholder's Wealth

Shareholder's Wealth is the sum total of the capital value of a company's shares plus any retained earnings or losses. It represents the shareholders' stake in the company.

Stock Split

A corporate action in which a company divides its existing shares into multiple shares to boost the liquidity of the shares, although the overall value of one's holdings remains the same.