<span>This is what Joe says: "Information is more important than the additional revenue and additional cost of being open 1 more hour."
He is a wise person</span>
Answer:
C) While the domestic airline industry is mostly free from excess capacity, the internet-enabled appliance industry will have new entrants.
Explanation:
While the domestic airline industry is in the maturity stage of the industry life cycle, the internet-enabled appliance industry is in its growth stage. Therefore the statement that can be inferred from the given data is that: while the domestic airline industry is mostly free from excess capacity, the internet-enabled appliance industry will have new entrants.
The major feature of the growth stage in the industry life cycle is market rivalry due to the fact that there is now acceptance of the product, <u>more new entrants join the industry and more intense competition results</u>
Answer:
The correct answer is True.
Explanation:
To survive, companies must execute their activity in the present but also be able to adapt to future challenges. However, the facts tell us that very few do both well, especially the second. Every source of competitive advantage has an expiration date, and few companies have the ability to identify and exploit new sources when the originals begin to run out. Most often, when setting priorities, the short-term pressure makes current needs prevail over any future considerations and decisions are made that, although favoring execution today, are compromising the organization's adaptability in the medium term.
Answer:
d. Law of Demand
Explanation:
The law of demand states, the quantity demanded of a product is indirectly related to it's price keeping other factors affecting demand as constant.
The law states, more of a product is demanded when it's price falls and vice versa.
It is noteworthy here that it is quantity demanded which changes when only price changes, not the demand itself. Demand would change when factors affecting demand other than price of the product change.
In the given case, when price of high speed internet decreases, the quantity demanded increases. The statement indicates the operation of the law of demand.
Answer: SEE EXPLANATION
Explanation:
Given the following ;
Values depending on Success
$150M, $135M, $95M, $80M
Risk free rate = 5% = 0.05
Pervebtage to be lost in case of bankruptcy = 25% = 0.25
A.) 0.25 × [( 150 + 135 + 95 + 80) ÷ 1.05] = $109.52 million
Assume a zero-coupon debt with a $100million face value
B.) 0.25 × [( 100 + 100 + (95×0.75) + (80×0.75)) ÷ 1.05] = $78.87 million
C.) Yield to maturity (YTM)
(100M÷78.87M) - 1
1.2679 - 1 = 0.2679 = 26.79%
Expected return = 5%
D.) Equity value
0.25 × [( 150 + 135 + (95×0.75) + (80×0.75)) ÷ 1.05] = $99.11 million
E.) share if no debt is issued
109.52 ÷ 10 = 10.95 per share
F.) Share price if debt of $100M is issued
99.11 ÷ 10 = 9.91 per share
The price differs because bankruptcy cost will Lower the share price.