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 expected 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