Which of the Following Is a Reason Why It Is

question 5

Multiple Choice

Which of the following is a reason why it is difficult for investors to interpret the relation between value creation and management ownership concentration using market-to-book value ratio?

• A)The market value to its book value is a subjective measure of value creation.
• B)The market-to-book ratio is affected the volatility in book values.
• C)The market-to-book ratio measures more than management effectiveness.
• D)The market-to-book ratio is only an indicator of market-wide risk.

---

Definitions:

Recipient

An individual or organization that receives something from another entity, often within the context of transactions or awards.

Charitable Entity

An organization established for philanthropic rather than profit-making purposes, benefiting the public or a particular social cause.

Cash Contributions

Monetary gifts made by individuals or organizations to entities such as companies, nonprofits, or trusts, often for specific purposes or projects.

Donated Goods

Items given to an organization at no cost, often recognized in the recipient's financial records as income or an asset.