The Options for Allocating a Diversified Company's Financial Resources Include

question 152

Multiple Choice

The options for allocating a diversified company's financial resources include:

• A) making acquisitions to establish positions in new businesses or to complement existing businesses.
• B) investing in ways to strengthen or grow existing businesses.
• C) funding long-range R&D ventures aimed at opening market opportunities in new or existing businesses.
• D) paying off existing debt,increasing dividends,building cash reserves,or repurchasing shares of the company's stock.
• E) All of these.

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Definitions:

Realizing Profits

The process by which a firm converts its operations and investments into financial gains or returns.

Economic Profits

The disparity between a company's overall income and its comprehensive economic expenses, accounting for both direct (explicit) and indirect (implicit) costs.

Purely Competitive

A market structure characterized by many sellers offering identical products, leading to no single seller influencing the market price.

Market Price

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