An Upscale Segment Is Always a Tempting One for Marketers

question 34

True/False

An upscale segment is always a tempting one for marketers to target because marketers assume that those customers can afford to purchase their goods or services, with a little less price sensitivity than other customers.

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Definitions:

Leverage Gain

The increase in potential returns to an investor achieved by using borrowed funds or financial derivatives.

Cost of Equity

The return a company requires to decide if an investment meets capital return requirements; it represents the compensation the market demands in exchange for owning the asset and bearing the risk of ownership.

Capital Structure

The composition of a company’s debt and equity used to finance its overall operations and growth.

Market Risk Premium

The additional return an investor requires from a market portfolio over the risk-free rate, compensating for the risk of the investment.