Which of the Following Will Most Directly Influence a Company's

question 48

Multiple Choice

Which of the following will most directly influence a company's market value?

• A) the state of the economy
• B) the book value of its assets
• C) the use of financial leverage
• D) its future cash flows

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Definitions:

Future Cash Inflows

Expected cash receipts or revenues generated from business activities in future periods.

Rate of Return

The gain or loss of an investment over a specified period, expressed as a percentage of the investment’s cost.

Internal Rate of Return

The metric used to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows equal to zero.

Cash Outlay

The total amount of cash that is spent by a business or organization for certain purposes or activities, including investments or expenses.