Which of the Following Signals Would NOT Warn Challengers That

question 108

Multiple Choice

Which of the following signals would NOT warn challengers that strong retaliation is likely?

• A) Publicly announcing management's commitment to maintain market share
• B) Publicly committing to a company policy of matching competitors' terms or pricing
• C) Maintaining a war chest of cash and marketable securities
• D) Making a strong counter-response to the moves of weak competitors
• E) Announcing strong quarterly earnings potential to financial analysts

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Definitions:

Dividends

Are the distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.

Market-capitalization Rate

A valuation metric that assesses the total value of a company's outstanding shares by multiplying the stock price by the total number of shares.

Plowback Ratio

A financial metric indicating the proportion of earnings retained by a company after dividends are paid, used for reinvestment into business operations.

Expected ROE

The projected return on equity for a future period, based on estimates of future earnings and shareholders' equity.