Profit and Value of the Firm Are Two Concepts Which

Multiple Choice

Profit and value of the firm are two concepts which are:

A) Unrelated because cash flow not profit is the main determinant of firm value
B) Closely linked because the present value of a firm's future profits approximates to the market value of its securities
C) Closely linked because dividends are paid out of profits and it is dividends that determine the market value of a firm's shares
D) Closely linked because the market value of a firm is determined by its profits multiplied by the price-earnings ratio of its shares