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For Many Years, Quokka Consumer Ltd

question 131

Essay

For many years, Quokka Consumer Ltd. has had a geographic divisionalized organizational structure. Now, the company is rethinking the appropriateness of this structure compared to other divisionalized structures. Provide three reasons why companies such as Quokka might want to move away from the geographic structure.


Definitions:

Valuation

The process of determining the present value of an asset or a company.

Comparing Firms

The analysis, often financial-based, used to compare the performance, efficiency, and health of different companies.

Abnormal Earnings

Profits that exceed or fall short of the earnings typically expected by the market for a company or industry sector.

Cost Of Equity Capital

The rate of return required by shareholders to compensate for the risk of investing in a company, influencing the company's valuation and capital structure.

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