Which of the Following Is Probably Not an Acceptable Solution

question 120

Multiple Choice

Which of the following is probably not an acceptable solution to the problem of diseconomies of scale?

• A)reorganization
• B)building a larger plant
• C)dividing operations
• D)hiring new managers

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Definitions:

Return on Equity

An indicator of a company's financial performance, showing the amount of profit generated per dollar of shareholders' investment.

Required Return

The minimum expected return an investor demands for investment in a specific asset, considering its risk profile.

Earnings

The profit a company makes after deducting its operating expenses, taxes, and costs from its revenue.

One-Period Valuation Model

A model for determining the current value of a stock based on the dividend expected at the end of one period and the anticipated selling price.