Which of the Following Is Not a Reason Why the Growth

question 69

Multiple Choice

Which of the following is not a reason why the growth strategy is so desirable?

• A) There are more opportunities for advancement and promotion.
• B) A corporation that experiences successful growth is thought of positively by the marketplace and potential investors.
• C) A large and growth-oriented corporation has more clout and influence.
• D) A growing firm can cover up mistakes and inefficiencies because of the increase in cash flow revenue.
• E) A large and growing firm attracts more acquisition offers.

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Definitions:

Common Stock

Equity ownership in a corporation, entitling shareholders to a share of the company’s profits through dividends and voting rights.

Long-term Investment

Investments made to be held for several years or more, typically in bonds, stocks, or real estate.

Financing Activities

Transactions involving the flow of cash between a company and its owners or creditors, typically relating to equity and long-term debt.

Treasury Stock

Shares that were issued and subsequently bought back by the issuing company, reducing the amount of outstanding stock on the open market.