Which of the Following Statements About the Internet's Effect on the Competitive

question 14

Multiple Choice

Which of the following statements about the Internet's effect on the competitive forces that exist in a company's environment is true?

• A) The Internet increases barriers to entry.
• B) Overall, the Internet tends to decrease the bargaining power of suppliers.
• C) The Internet blurs differences among competitors.
• D) The Internet creates fewer substitution threats.
• E) All of these

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Definitions:

Equity Capital

Funds raised by a company in exchange for shares of ownership, representing the value of shareholders' equity.

Retaining Earnings

Profits that a company has decided to keep or reinvest in itself rather than pay out as dividends to its shareholders.

Cost of Debt

The effective rate that a company pays on its total debt, reflecting the expense of borrowing funds.

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital where each category of capital is proportionately weighted, including equity, debt, preferred stock, and any other long-term debt.