Driving-Forces Analysis Has

question 135

Multiple Choice

Driving-forces analysis has

• A)speculative value because it compels the firm to drive strategic intent and collective choice into operating practices.
• B)theoretical value because it allows managers to visualize the many different dimensions of the preferred forces that allow for industry functionality.
• C)practical value and is basic to the task of thinking strategically about where the industry is headed and how to prepare for the changes ahead.
• D)no real analytical value because the driving forces are already established in the marketplace and it is too late to make astute and timely strategy adjustments.
• E)perceived value and is associated with identifying the close and distant rivals within an operating industry.

Grasp the fundamentals of capital structure, including the effects of debt-to-equity ratios on financing.

Apply the cost of capital concepts, including the weighted average cost of capital (WACC), in project evaluation.

Understand and calculate the cost of equity and debt financing.

Evaluate the effect of a project's risk on its required rate of return and capital cost.

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Definitions:

Values and Principles

Fundamental beliefs and guidelines that dictate the behavior and actions of an individual or organization.

Right from Wrong

The ability to distinguish ethical behavior from unethical behavior based on moral principles.

Ethical Justifications

The reasoning provided to explain why a particular action or decision is morally right.

Self-Serving Decisions

Choices made with the primary aim of benefiting oneself, often at the expense of others or ethical considerations.