Although growth is often touted as one of the key drivers of the value of a stock, no amount of growth will increase the value of a company if its return to providers of capital is less than the cost of that capital.

Question

Quizplus · Accepted Answer

This statement is true. The value of a company is ultimately determined by the returns it generates for its investors, and if those returns are not sufficient to cover the cost of capital, growth alone will not increase the company's value.

Although Growth Is Often Touted as One of the Key