Which of the Following Statements Best Describes the Term Backward

question 24

Multiple Choice

Which of the following statements best describes the term backward integration?

• A)A firm imposes extra costs on customers for changing brands.
• B)A firm joins an alliance with its competitor to share materials.
• C)A firm goes into the business of its former buyers, rather than continuing to sell products to them.
• D)A firm purchases its suppliers in order to make a product itself rather than buying it from another firm.

---

Definitions:

Securities Offered

Financial instruments such as stocks, bonds, or options that are made available for sale to investors.

Direct Cash

Cash transactions that involve the immediate transfer of money for goods or services, without any delay in payment.

IPO Underpricing

The phenomenon where shares of a company are sold at a lower price during the initial public offering than the price at which they subsequently trade in the open market.

Offering Price

The price at which shares of a company are initially made available for purchase during an initial public offering or other issuance.