In Order to Ensure That It Has a Competitive Advantage

question 65

Multiple Choice

In order to ensure that it has a competitive advantage over its competitors, Best Star, Ltd., decides to acquire the much smaller KAG, Inc. The move is an example of a

• A)vision.
• B)business model.
• C)strategy.
• D)mission.

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Definitions:

Call Option

is a financial contract that gives the holder the right, but not the obligation, to buy an asset at a specified price within a specific time period.

Strike Price

The set price at which the holder of an options contract can buy or sell the underlying asset.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the issuing company's equity at certain times during its life, usually at the discretion of the bondholder.

Conversion Price

The predetermined price at which convertible security, such as a convertible bond or preferred stock, can be converted into a specified number of shares of common stock.