Answer:
The answer is narrower competitive scope.
Explanation:
In a narrow competitive scope, a business might choose a focus strategy which can be oriented to cost leadership or differentiation. When implementing a focus strategy, the company chooses to only produce goods or provide services to a certain segment of people. In a cost leadership strategy, the business might choose to engage on initiatives that would lead it to be identified from its ability to provide the lowest possible price for its target segment. When choosing a differentiation strategy instead, the company’s competitive advantage would be its ability to provide a wide range of products.
Answer:
The market's required rate of return on Sure's stock is 16.5%
Explanation:
The required rate of return is the minimum return that investors would accept to invest in a stock based on the risk associated to that stock. The required rate of return can be calculated using the Capital Asset Pricing Model (CAPM). The formula for required rate of return under this model is,
Required rate of return (r) = rFR + Beta * (rM - rFR)
Where,
- rFR is the risk free rate
- Beta is the stock's measure of risk
- rM is the expected return on market
Thus, for Sure Tool, the required rate of return is,
r = 0.04 + 1.25 * (0.14 - 0.04)
r = 0.165 or 16.5%
