Alligator Enterprises Has Earned Above-Average Returns Since Its Founding Five

question 107

True/False

Alligator Enterprises has earned above-average returns since its founding five years ago. Since no other firm has challenged Alligator in its particular market niche,the firm's owners can feel secure that Alligator has established a competitive advantage.

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Definitions:

Acquisition

The process by which one company purchases most or all of another company's shares or assets, gaining control over the acquired company.

Consolidated Retained Earnings

The cumulative amount of profits kept by a company after dividends are paid, as reported in consolidated financial statements that merge the accounts of parent and subsidiary entities.

Par Value

The face value of a bond or stock as stated in the corporate charter or on the certificate.

Fair Value

Fair value is the estimated market price of an asset or liability, reflecting the price at which it could be exchanged between willing parties in an arm's length transaction.