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Lorico [155]
3 years ago
5

According to the Ansoff Growth Matrix, the strategic option of A.) Market Penetration. B.) Product Development. C.) Diversificat

ion. is the riskiest for a business to pursue. A business would use a A.) Horizontal Diversification. B.) Conglomerate Diversification. C.) Concentric Diversification. strategy if it decides to launch new products in new markets.
Business
2 answers:
jeyben [28]3 years ago
5 0

Answer:

According to the Ansoff Growth Matrix, the strategic option of <u>C) DIVERSIFICATION</u> is the riskiest for a business to pursue.

A business would use a <u>B) CONGLOMERATE DIVERSIFICATION</u> strategy if it decides to launch new products in new markets.

Explanation:

Diversification carries a higher risk because it involves selling new products or services in new markets. It does have an advantage though, if one business unit performs poorly, it will not necessarily affect the other business unit which might perform very well.

A conglomerate diversification strategy is useful when a corporation wants to start selling new products in new markets. The most common way of carrying out a conglomerate diversification strategy is through mergers and acquisitions (M&A).

Stella [2.4K]3 years ago
3 0
1/ C. Diversification is the riskiest strategic option.

2/ B. Conglomerate Diversification.
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Bouchard Company's stock sells for $20 per share, its last dividend (D0) was $1.00, and its growth rate is a constant 6 percent.
Delicious77 [7]

Answer:

The answer is 11,3%

Explanation:

The cost of common stock is common stockholders’ required rate of return. There are 3 methods to calculate the cost of common stock:

i- Dividend discount model or DMM

ii- Capital asset pricing model or CAPM

iii- Bond yield plus risk premium approach

Because of the information provided by the exercise, the correct method to use is de Dividend discount model.

Knowing the current market price of a stock and the last dividend paid, we can calculate the required rate of return, which is equal to the cost of common stock.

rs=(D1/P0)+g

D1= expected dividend

P0= current market price of the stock

g= dividend’s growth rate

To calculate D1 you need to use the following formula= D0x(1+g)

<u>Using the exercise information:</u>

D1=D0*(1+g)=1*1,06=1,06

P0=20

g=0,06

rs=(1,06/20)+0,06=0,113*100=11,3%

5 0
3 years ago
A company developed the following per-unit standards for its product: 2 gallons of direct materials at $8 per gallon. Last month
Radda [10]

Answer:

$880 favorable

Explanation:

The computation of direct materials price variance for last month is shown below:-

Direct material price variance = Actual quantity × (Standard price - Actual price)

= 2,200 × ($8 - ($16,720 ÷ 2,200)

= 2,200 × ($8 - 7.6)

= 2,200 × $0.4

= $880 Favorable

Therefore for computing the direct materials price variance for last month we simply applied the above formula.

4 0
3 years ago
The town of Gracie has established a permanent fund to account for numerous significant gifts intended to maintain a cemetery in
Viktor [21]

Answer: B. Restricted Fund Balance

Explanation:

A Restricted Fund is created when the source of the funds sets certain stipulations for the use of the money which in this case is that the monies should be used for the maintenance of the cemetery. The monies will therefore be restricted to that use alone.

The Unspent Investment Earnings will be reinvested in the Permanent fund at the end of the year. The Permanent Fund is a Restricted fund account therefore the Unspent earnings will be classified as a Restricted fund balance as well.

4 0
3 years ago
Which is not capital?
KiRa [710]
C Is The Answer I Just Took This My E2020.
6 0
3 years ago
Consider the following two stocks, A and B. Stock A has an expected return of 10% and a beta of 1.20. Stock B has an expected re
mina [271]

Answer: Stock B

Explanation:

Use CAPM to calculate the required returns of both stocks.

Stock A

Required return = Risk free rate + beta * ( Market return - risk free rate)

= 5% + 1.20 * (9% - 5%)

= 9.8%

Stock B

Required return = 5% + 1.8 * (9% - 5%)

= 12.2%

Both of them have Expected returns that are higher than their Required returns so both of them are good buys.

The better buy would be the one that has more expected value excess over required return.

Stock A excess = 10% - 9.8% = 0.2%

Stock B excess = 14% - 12.2% = 1.8%

<em>Stock B offers a higher excess and is the better buy. </em>

7 0
3 years ago
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