A Company Achieves Sustainable Competitive Advantage When

question 35

Multiple Choice

A company achieves sustainable competitive advantage when

• A)it has a profitable business model.
• B)a sufficiently large number of buyers have a lasting preference for its products or services as compared to the offerings of competitors.
• C)it is able to maximize shareholder wealth.
• D)it is consistently able to achieve both its strategic and financial objectives.
• E)its strategy and its business model are well matched and in sync.

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Definitions:

Unsuitable Projects

Projects that are not appropriate or ideal for meeting the strategic, operational, or financial goals of an organization.

Yield-to-Maturity

The total return anticipated on a bond if it is held until it matures, accounting for interest payments and repayment of capital.

Cost of Debt

The effective rate that a company pays on its total debt, representing the interest expense on outstanding debt.

WACC

The weighted average cost of capital, a calculation that reflects the average rate of return a company is expected to pay its security holders to finance its assets.