Because external factors create volatility in stock prices, a better measure of a firm's performance over the long term is the Blank______.Multiple choice question.the NASDAQ computer indexsum total of the market's trajectorytotal return to shareholdersunemployment rate
Question
Because external factors create volatility in stock prices, a better measure of a firm's performance over the long term is the Blank______.Multiple choice question.the NASDAQ computer indexsum total of the market's trajectorytotal return to shareholdersunemployment rate
Solution
The correct answer is "total return to shareholders". This measure includes both capital gains (increase in stock price) and dividends, which are a direct return of profits to shareholders. It is a more comprehensive measure of a firm's performance over the long term as it takes into account both the growth of the firm (reflected in the stock price) and the profitability of the firm (reflected in the dividends).
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