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In Order to Reduce Production Costs, Tryon Inc

question 64

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In order to reduce production costs, Tryon Inc., an automobile manufacturer, decided to buy out a glass plant and begin manufacturing the glass for the windows of cars on its own. The corporate strategy adopted by the company is known as


Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its earnings without needing to increase its equity or take on new debt.

Dividend Payout Ratio

The percentage of a company's earnings that is distributed to shareholders in the form of dividends.

Equity Multiplier

A financial ratio indicating how much of a company's assets are financed by shareholders' equity.

Dividend Payout Ratio

The fraction of net income a firm pays to its stockholders in dividends, expressed as a percentage of the company's total earnings.

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