Which of the Following Statements Is CORRECT

question 18

Multiple Choice

Which of the following statements is CORRECT?

• A) Once a firm has defined its purpose,scope,and objectives,it must develop a strategy or strategies for achieving its goals.The statement of corporate strategies sets forth detailed plans rather than broad approaches for achieving a firm's goals.
• B) A firm's corporate purpose states the general philosophy of the business and provides managers with specific operational objectives.
• C) Operating plans provide management with detailed implementation guidance,consistent with the corporate strategy,to help meet the corporate objectives.These operating plans can be developed for any time horizon,but many companies use a 5-year horizon.
• D) A firm's mission statement defines its lines of business and geographic area of operations.
• E) The corporate scope is a condensed version of the entire set of strategic plans.

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Definitions:

Market Value

The present rate at which a product or service can be purchased or sold in the market.

Residual Dividend Policy

A strategy where a company pays dividends out of the residual or leftover equity once all project capital requirements are met.

Payout Ratios

The percentage of a company's earnings distributed to its shareholders in the form of dividends, relative to its total earnings.

Stock Repurchases

A corporate action in which a company buys back its own shares from the marketplace, reducing the amount of outstanding stock.