The firm’s demand risk can best be analyzed by examining: A) the components of the firm’s marketing plan. B) the components of the firm’s marketing management compared with the key industry success factors. C) the key industry success factors and their impact on profitability. D) the behavior of the firm’s major competitors. ANSWER […]
Operating leverage results from the existence of operating costs in a firm’s income stream. Indicate whether the statement is true or false ANSWER FALSE
In the short-run, firms tend to stick to a stable dollar-dividend policy. Indicate whether the statement is true or false ANSWER TRUE
Commercial paper is a form of financing that consists of short-term, secured promissory notes issued by firms with a high credit standing. Indicate whether the statement is true or false ANSWER FALSE
Value proposition refers to: A) a statement that describes the benefits of the firm’s products and services. B) a statement that describes the unique features of the firm’s products and services. C) a statement that describes why a specific target customer should choose the firm’s products or use its services. D) None of the above. […]
Operating leverage may be defined as the potential use of fixed operating costs to magnify the effects of changes in sales on a firm’s earnings before interest and taxes (EBIT). Indicate whether the statement is true or false ANSWER TRUE
Direct forms of bankruptcy costs include legal and administrative costs associated with the actual bankruptcy proceedings, as well as the money paid to lawyers. Indicate whether the statement is true or false ANSWER TRUE
The mandate of the board of directors is to ensure that management makes decisions that are consistent with maximizing the value of PREFERRED shares. Indicate whether the statement is true or false ANSWER FALSE
When two groups have different access to information, there is then SYMMETRIC information for these two groups. Indicate whether the statement is true or false ANSWER FALSE
Banker’s Acceptances are closely affiliated with international transaction rather than domestic ones. Describe and provide an example of how this market works and why there is a need for the instrument. What will be an ideal response? ANSWER When firms engage in international trade they are often unfamiliar with the customer and the […]
