Why Are Banks Merging

question 171

Multiple Choice

Why are banks merging?

• A) because they want fewer customers
• B) because they want to reduce operating costs per customer
• C) to shrink their geographical reach
• D) to reduce risk of bad loans to one area
• E) to reduce the number of branches

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Definitions:

Profit Margin

A financial metric that measures the amount of net income generated as a percentage of revenue, indicating how effectively a company can convert sales into net profits.

Dividend Payout Ratio

The percentage of earnings paid to shareholders in dividends, indicating how much money a company returns to shareholders versus reinvesting in the business.

Financial Planning Models

Tools or software used for projecting future financial results and for strategic financial planning, often in the form of spreadsheets or specialized software.

Financial Relationships

Financial relationships refer to the connections between different financial variables, metrics, and performance indicators that help in analyzing and evaluating the financial health of an entity.