Applying the Five Forces Model to the Airline and Soft

question 67

Multiple Choice

Applying the five forces model to the airline and soft drink industries demonstrates all EXCEPT which of the following?

• A) The soft drink industry has fairly low forces.
• B) The airline industry has a high level of forces.
• C) The profit level should be higher in the soft drink industry than the airline industry.
• D) The macro environmental forces are similar between the airline and soft drink industries.

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Definitions:

Par Value

A nominal value assigned to a security, such as a stock, which is stated in the corporate charter and often bears no relation to its market value.

Price-Earnings Ratio

A valuation metric for a company's current share price relative to its per-share earnings, indicating how much investors are willing to pay for each dollar of earnings.

Earnings Per Share

A financial metric that calculates the portion of a company's profit allocated to each outstanding share of common stock.

Market Price

The present cost at which a service or asset is available for purchase or sale.