When Media Informed the Public That Nestlé Had Access to Groundwater

question 10

Multiple Choice

When media informed the public that Nestlé had access to groundwater reservoirs at a very low price,creating significant public interest,Nestlé responded by acknowledging that they shared the public's "concern" for water sustainability. Which kind of strategy did Nestlé use to respond to its social responsibility problems?

• A)reactive strategy  
• B)prospective strategy  
• C)proactive strategy  
• D)accommodative strategy

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Definitions:

FCFF

Free Cash Flow to Firm; a measure of financial performance that expresses the net amount of cash that is generated for the firm, inclusive of financing and debt service.

EBIT

Earnings Before Interest and Taxes, a measure of a company's profitability that excludes the effect of financial and tax decisions.

Depreciation

The allocation of the cost of an asset over its useful life, reflecting the decrease in value due to use and age.

Terminal Growth Rate

The rate at which a company's free cash flow is expected to grow at indefinitely, used in the discounted cash flow analysis to estimate a company's value.