Which Strategy Is Effective When New, but Related, Products Could

question 5

Multiple Choice

Which strategy is effective when new, but related, products could be offered at highly competitive prices?

• A) Forward integration
• B) Related diversification
• C) Backward integration
• D) Conglomerate diversification
• E) Unrelated diversification

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Definitions:

Retained Earnings

Cumulative net earnings not distributed as dividends to shareholders, reinvested in the business or available for debt repayment.

Par Value

The nominal or face value of a bond, share of stock, or coupon as indicated on a certificate or instrument.

Dividend Rate

The amount of dividend paid per share divided by the price per share, often expressed as a percentage, indicating the returns shareholders receive for each dollar invested in the company's stock.

Date of Record

The cutoff date set by a company to determine which shareholders are eligible to receive a dividend or participate in a corporate action.