Exit Barriers May Arise from

question 32

Multiple Choice

Exit barriers may arise from

• A) flexible assets with alternative uses.
• B) lack of governmental and social pressures.
• C) strategic competitors
• D) concerns about image.

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Definitions:

SML Approach

Refers to the Security Market Line approach, a graphical representation in the Capital Asset Pricing Model (CAPM) that depicts the relationship between risk and expected return for all securities.

Flotation Costs

Expenses incurred by a company in issuing new securities, including legal, administrative, and underwriting fees.

Computed NPV

The calculated Net Present Value based on a specific discount rate and series of cash flows.

Perpetual Cash Flows

Cash flows that are expected to continue indefinitely without an end.