The value of Internet companies is based primarily on ________.

A) current profits
B) Tobin's q
C) growth opportunities
D) replacement cost

Question

The value of Internet companies is based primarily on ________.A)  current profitsB)  Tobin's qC)  growth opportunitiesD)  replacement cost

Daisy Howell · Accepted Answer

Final Answer : C, Explanation :  The value of Internet companies is mainly based on their growth opportunities, such as expanding their user base, introducing new products or services, and increasing revenue streams. Internet companies often reinvest their profits back into their businesses, resulting in little or no current profits. Tobin's q compares a company's market value to its replacement cost, which may not be relevant for Internet companies that rely on intellectual property and intangible assets. Replacement cost is also not a significant factor in determining the value of Internet companies.

The value of Internet companies is based primarily on ________.

A) current profits
B) Tobin's q
C) growth opportunities
D) replacement cost

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