Question: Question 4: (25marks) Define market capitalization and its impact on organizations; list its formula and explain each component? (7.5marks) A company's most important goal is

Question 4:(25marks)

  1. Define market capitalization and its impact on organizations; list its formula and explain each component? (7.5marks)
  2. A company's most important goal is to make money and keep it, which depends on liquidity and efficiency. Because these characteristics determine a company's ability to pay investors a dividend, profitability is reflected in share price.Therefore investors should know how to analyze various facets of profitability; including how efficiently a company uses its resources and how much income it generates from operations. Define how to calculate and analyze a corporate profit margin and reflect on the impact of COVID-19 on 2020s corporations profit margins. (12.5marks)
  3. Define the Time Value of Money and its relation to the present value of cash flows.

(5 marks)

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