Which Action Does NOT Always Increase a Company's Market Value

question 3

Multiple Choice

Which action does NOT always increase a company's market value?

• A) increasing the expected growth rate of sales
• B) increasing the expected operating profitability (nopat/sales)
• C) decreasing the capital requirements (capital/sales)
• D) decreasing the weighted average cost of capital

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Definitions:

Standard Price

A predetermined cost that companies use for budgeting and assessing the performance of actual costs.

Actual Materials Purchased

The total quantity and cost of raw materials bought during a period for the purpose of production.

Labour Rate Variance

The difference between the actual cost of labor and the standard or expected cost.

Standard Cost Per Bag

A pre-determined cost estimate for producing or purchasing a single unit of product, in this context, a bag.