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.

Question

Quizplus · Accepted Answer

A company's market value is primarily determined by investors' expectations of its future cash flows, including earnings and dividends. The state of the economy, book value of assets, and use of financial leverage may have some impact, but they are not as directly tied to a company's market value as its future cash flows.

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