Which of the Following Statements Is True in the Context

question 59

Multiple Choice

Which of the following statements is true in the context of the BCG growth-share matrix?

• A) Cash cows typically turn into stars.
• B) Stars often need heavy investment to finance their rapid growth in a market.
• C) The income from one SBU cannot be used to support other business units.
• D) Dogs promise to be large sources of cash.
• E) The positions of SBUs in the growth-share matrix rarely change over time.

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Definitions:

Old Issue

A topic or problem that has been present or discussed for a long time.

New Bond Issue

The process of offering new bonds to investors for the first time to raise capital for the issuer.

Convertible Bonds

Bonds that can be converted into a predetermined number of a company’s shares, at the option of the bondholder, usually at certain times during their life.

Book Value Method

An accounting technique that determines the value of an asset as per the company’s balance sheet, subtracting liabilities from assets.