The major factors that determine the market value of a company's shares of stock include all of the following EXCEPT ____.
A) risk of its cash flows
B) timing of its cash flows
C) book value of its assets
D) risk of its cash flows and the timing of its cash flows

Question

Quizplus · Accepted Answer

The book value of a company's assets is not a direct factor in determining the market value of its shares of stock. The market value is primarily based on the company's future earnings potential and the perceived risk associated with those earnings. The timing and risk of the company's cash flows are factors that directly impact these earnings projections and therefore influence the market value of the stock.

The Major Factors That Determine the Market Value of a Company's