A Firm Purchasing a Key Supplier to Strengthen Its Value

question 51

Multiple Choice

A firm purchasing a key supplier to strengthen its value chain is an example of _____.

• A)collaboration
• B)outsourcing
• C)vertical integration
• D)unrelated diversification

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Definitions:

Rights Offering

The offering of new shares to existing shareholders at a discounted price, allowing them to buy additional shares directly from the company.

Stock Price

The value of a single share of a company's stock, representing ownership interest in the company.

Underwriting Spread

The underwriting spread is the difference between the amount underwriters pay to the issuer in a securities offering and the price at which the securities are sold to the public, serving as compensation for the underwriters.

Issue Costs

Costs related to the creation of new securities, encompassing fees for underwriting, legal services, and registration.