A Firm Plans to Use a Defensive Core Strategy of Optimize

question 31

Multiple Choice

A firm plans to use a defensive core strategy of optimize position,with the strategic objective of maximizing profits.Which of the following strategies is the firm most likely to implement as a part of its core strategy?

• A)enter new related markets
• B)reduce market focus
• C)develop new markets
• D)divest for cash flow
• E)harvest for cash flow

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Definitions:

Dividend-payout Ratio

The percentage of net income paid to shareholders in the form of dividends.

Share Price

The price of a single share of a number of saleable stocks of a company, derivative, or other financial asset.

Plowback Ratio

Plowback Ratio, also known as the retention ratio, is the proportion of earnings that a company retains and reinvests in its operations, rather than distributing as dividends.

Expected ROE

The anticipated return on equity, which measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.