The Bargaining Power of a Customer Is Weak If ________

question 40

Multiple Choice

The bargaining power of a customer is weak if ________.

• A)the availability of a rival product is limited
• B)the cost of switching to a substitute is low
• C)competitors offer products with same benefits at lower prices
• D)new entrants are offering a product that uses more recent technology

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Definitions:

FCFE Valuation Model

A method used to estimate the value of a company by discounting its expected free cash flows to equity holders at an appropriate risk-adjusted rate.

Discount Rate

The discount rate is the interest rate used to determine the present value of future cash flows in discounted cash flow analysis, reflecting the cost of capital or risk of the cash flows.

Required Rate of Return on Equity

The minimum rate of return that investors expect from their stock investments, considering the risk involved.

Plowback Ratios

A measure of how much of a company's net income is reinvested into the company rather than distributed to shareholders as dividends.