XYZ Is a New Hotel Chain and Is Relatively Unknown

question 54

Multiple Choice

XYZ is a new hotel chain and is relatively unknown among Disney park visitors.However,because Disney has attached its name to the hotel,most rooms are booked every night.This is probably because customers associate Disney with quality and so they also expect XYZ to be a high-quality hotel.This is an example of the __________ benefit of brand equity.

• A)Brand communications
• B)Brand image
• C)Brand connections
• D)Brand loyalty
• E)Brand sponsors

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Definitions:

Flotation Costs

The costs incurred by a company in issuing new securities, including underwriting, legal, and registration fees.

Equity Capital

Funds raised by a company in exchange for shares of ownership in the company.

Component Cost

The rate of return required by investors for each component of a company's capital structure.

Risk-Free Rate

The theoretical rate of return of an investment with zero risk, often represented by the yield on government securities like Treasury bonds.